Challenging Phoenix’s Burdensome, Illegal Prevailing Wage Mandate

The City of Phoenix (“City”) recently enacted a “Prevailing Wage” Ordinance (“Ordinance”) that regulates how contractors and subcontractors on public works projects pay their workers. The Ordinance requires these employers to pay their employers a “prevailing wage”—determined by the City Engineer based on complex tables set by the federal government—and it saddles them with burdensome record-keeping requirements. Moreover, violations of the Ordinance, including minor or inadvertent violations, can result in severe punishment: restitution, triple damages, withholding of contractual payments, and even disqualification from working on future public works contracts.

All of this is illegal. Arizona law clearly and expressly prohibits cities from enacting “prevailing wage” requirements for public works projects. What’s more, the Arizona constitution prohibits the government from depriving individuals or businesses of their rights without adequate legal safeguards, and the Ordinance gives an unelected bureaucrat—the City Engineer—virtually unchecked power to investigate and punish any contractor he believes has run afoul of the Ordinance’s requirements.

The Ordinance is invalid because it conflicts with both state law and the Arizona Constitution. The Goldwater Institute, together with co-counsel Robert G. Schaffer of Holden Willits PLC, has filed a lawsuit challenging it in Maricopa County Superior Court.