New Bills Benefit Employers in AZ
I. BUSINESS BILL OF RIGHTS LAW.
A law expanding the “Bill of Rights” for Arizona businesses has just
taken effect as a result of the Arizona Legislature’s actions during the
2014 term. Key provisions of the law were drafted by Julie Pace and
David Selden of The Cavanagh Law Firm, and NFIB took the lead to stand
up for companies’ rights and work with the State Legislature to get the
bill of rights adopted. The Arizona Chamber of Commerce was
instrumental to take the lead on the Unemployment and Severance Bill to
avoid double-dipping. This summary addresses both of the new laws.
The law expands the Business “Bill of Rights” and extends those rights
so that they will apply to OSHA inspections by the Arizona Division of
Occupational Safety and Health (“ADOSH”) and audits by the Arizona
Department of Economic Security (“DES”).
The key provisions of the new law are:
1. At the beginning of state government audits or investigations, the
agency must disclose certain basic information about the business’
2. The agency must later furnish information to the affected business
about the status and results of the investigation.
3. Businesses will be able to recover attorneys’ fees when the
government asserts claims against them in lawsuits or administrative
proceedings that are not substantially justified. B. Rights During Government Inspections
At the beginning of OSHA inspections or DES audits on unemployment
compensation issues, those agencies are now required to inform each
business of the following:
1. The purpose and legal authority for the inspection or audit;
2. The employer’s right to have an authorized on-site representative
accompany the inspector or auditor, except during confidential
3. The right to receive copies of any documents taken by the agency;
4. The right to receive a split of any samples taken and copies of any
analysis performed on the samples;
5. Copies of any documents relied upon to determine compliance with
6. The right to be notified if a conversation is recorded;
7. All witnesses must be told that their statements may be included in
the inspection or audit report;
8. The agency must disclose the name of its official to whom a business
may submit a complaint; and
9. The agency must disclose that the business may complain to the
Arizona Ombudsman’s Office if the agency representative does not
satisfactorily resolve a complaint to the agency.
C. Rights After Government Inspections
After an inspection, the government agency must:
1. Give a copy of any inspection report to the business either at the
time of the inspection or within 30 days thereafter; and
2. Provide a status update to the business every 30 days thereafter
a. Either the completion of the agency action; or
b. A decision that there will not be any agency action resulting from
Under the law, businesses will be able to recover their attorneys’ fee
if they prevail against the state government on the major issues in
lawsuits or administrative proceedings that the government brings
against them, if the judge or hearing officer determines that the
government’s position was not substantially justified.
This attorneys’ fees provision should make the government thoughtful and
cautious before bringing cases against business. It should also
provide more settlement leverage for businesses. Discourage government
lawyers from pursuing tactics that needlessly cause extra expenses to
business, as the government might ultimately be responsible for those
D. Legislative History
The Legislation was sponsored by Representative Tom Forese and was
passed unanimously by both the Arizona House, by a vote of 59 to 0 and
the Arizona Senate, by a vote of 28 to 0. The National Federal of
Independent Businesses was instrumental in pushing the bill and worked
closely with Julie Pace and David Selden at The Cavanagh Law Firm in
drafting key language to prevent objections from various state agencies
from blocking the final approval of the bill.
II. LEGISLATION TO PREVENT DOUBLE-DIPPING OF NEMPLOYMENT BENEFITS AND
A second employment law to benefit Arizona employer is HB 2115, which
will prevent employees from double-dipping by receiving unemployment
benefits at the same time that they are receiving severance pay if the
severance pay is equivalent to their former wages.
Unemployment benefits are intended to buffer employees from a loss of
income when they lose employment through no fault of their own.
Unemployment benefits are not intended to provide a windfall in which
employees income is increased by received unemployment benefits on top
of severance pay.
The new law does not deprive people of receiving unemployment benefits
altogether, but provides that the unemployment benefits will be paid
only when the severance pay runs out – if the employee is still
unemployed at that time. For severance pay that is paid in a lump sum,
there will be a formula that determines the amount of weeks for which
the severance pay is equivalent, and eligibility for unemployment
benefits will begin after those numbers of weeks have elapsed.
The new law overturns the results of an Arizona Court of Appeals
decision in January 2014 and reinstates the intent of changes to the
unemployment law that were made 20 years ago. By doing so, the law
gives an incentive for employers to provide severance pay, which of
course is a benefit for employees as well.
This legislation, HB 2115, was sponsored by Representative Karen Fann.
The bill was written by David Selden of The Cavanagh Law Firm, who also
drafted the law 20 years ago that originally fixed this problem, and
which the Court of Appeals circumvented in its January 2014 decision.
The attorneys in the Employment, Labor, Immigration and OSHA Group at
the Cavanagh Law Firm emphasize representing employers in matters
relating to the wage and hour audits, DOL cases, classification of
independent contractors, classification cases before DES involving
independent contractors, unemployment cases before the Arizona
Department of Economic Security, OSHA and ADOSH investigations, handling
fatalities at work, handling I-9, E-Verify and immigration compliance
strategies and audits, providing training to supervisors and employees
on a variety of topics, handling and assisting with investigations,
drafting and updating employee handbook and policies, addressing drug
and alcohol policies, and advising companies regarding ADA and FMLA and
counseling, discipline, and terminations