Mary Jo Pitzl

The Republic | azcentral.com

The fight over Arizona's new minimum-wage law is coming down to the wire, as a judge next week will consider whether to temporarily block the law just 11 days before it takes effect.

On Friday, Maricopa County Superior Court Judge Daniel Kiley rejected a request for an immediate hold on the law, and set a Tuesday hearing for the preliminary injunction sought by business groups.

Those groups, led by the Arizona Chamber of Commerce and Industry, argued a temporary restraining order was needed to eliminate the uncertainty employers face as the Jan. 1 effective date of the law nears.

"They are making business decisions right now on whether to lay off employees on Monday," attorney Brett Johnson told the court. A restraining order, he said, would give employers some certainty over the weekend that they would not have to make any "rash decisions" due to Proposition 206.

Voters approved Prop. 206 last month, agreeing to raise Arizona's current $8.05 an hour minimum wage to $10 on Jan. 1, and to gradually raise it to $12 an hour by 2020.

RELATED: After minimum-wage hike, Arizona companies serving people with disabilities to face a funding crisis

Friday's hearing happened barely 24 hours after the lawsuit was filed, and Kiley said that hardly gave defendants time to prepare their case. The state, along with the Healthy Families campaign that brought Prop. 206 to the ballot, is defending the law.

Johnson defended the timing of the lawsuit, coming weeks before the wage law takes effect. He said they needed a "trigger" to go to court to demonstrate their complaint that the ballot measure lacked a defined funding source to cover the cost of increased payments by state government. That trigger came Wednesday, when AHCCCS, the state's Medicaid program, announced it had found $45 million in extra funds to cover the increased cost to its contractors, who have to increase what they pay their private employees.

The business groups argue those extra costs connected to Prop. 206 needed to have a funding source identified; the state Attorney General's Office and other defendants note the state is exempt from the provisions of the ballot measure and the extra costs are something the contractors have to cope with.

Bill Riddle, owner of the Valle Luna Mexican Restaurants y Cantinas, said he will not make any personnel moves over the weekend. The restaurant chain has only eight staffers who would need to have their pay hiked to $10, suggesting the operation can absorb the cost. But Valle Luna has 115 staffers who work for tips, and the impact of the higher wage will force crucial business decisions, he said.

Under Prop. 206, tip workers can be paid $3 an hour less than the minimum wage, as long as their total compensation meets the minimum-wage threshold.

Tuesday's court hearing is set for 1:30 p.m. before Kiley and is scheduled to last three hours.

Reach the reporter at maryjo.pitzl@arizonarepublic.com and follow her on Twitter @maryjpitzl

Minimum-wage protesters march to Arizona Capitol

Arizona business leaders sue to stop minimum wage hike