worker retention; requirements; state contracts

HB4089 - 572R - I Ver

REFERENCE TITLE:
worker retention; requirements; state contracts

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 4089

Introduced by

Representatives
Sandoval: Abeytia, Aguilar, Austin, Blattman, Cavero, Connolly, Contreras L,
Contreras P, Crews, Garcia, Liguori, Luna-N�jera, M�rquez, Mathis, Peshlakai,
Simacek, Stahl Hamilton, Tsosie, Villegas, Volk

AN
ACT

amending title 23, chapter 2, article 1,
arizona revised statutes, by adding section 23-207; relating to
employment.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 23, chapter 2, article 1,
Arizona Revised Statutes, is amended by adding section 23-207, to read:

START_STATUTE
23-207.

Service contracts; employment offers; rulemaking; definitions

A. The following apply to A service
contract that is entered into by this state:

1. Within ten days after receiving a
list of employees from this state or a predecessor contractor, the contractor
shall make written offers of employment for a ninety-day transition employment
period to all employees of the predecessor contractor or subcontractor and
deliver the offers by certified mail. �The offers of employment must:

(
a
) Request
that the employee return the offer to the contractor with the employee's
signature indicating acceptance or rejection of the offer.�

(
b
) State that
if an employee fails to return a written acceptance of the offer within ten
days after the date that the offer is mailed, the employee is presumed to have
declined the offer.

2. If work-related requirements
for a particular job classification under the service contract differ from the
predecessor contract, the contractor or subcontractor shall give notice to this
state and provide an explanation of the contractor's or subcontractor's
determination.

3. The contractor shall provide to this
state copies of the employment offers and proof of mailing.

4. If at any time the contractor
determines that fewer employees are required to perform the new service
contract than were required by the predecessor contractor and subcontractors,
the contractor shall retain employees by seniority within job classification.�
The contractor shall give notice to this state and provide an explanation for the
contractor's decision within ten days after the contractor receives the list of
the predecessor contractor's employees.

5. The contractor shall retain
employees from the predecessor contract for a ninety-day transition EMPLOYMENT
period, absent cause for termination on an individual basis.� If pooling of
employees has occurred, the contractor shall draw from the pools pursuant to
rules adopted by the department of administration or other state entity.�
During the ninety-day period, employees that are hired pursuant to this
paragraph shall be employed under the terms and conditions established by the
successor contractor or subcontractor or as required by law.

6. During the ninety-day transition
employment period, the contractor shall maintain a preferential hiring list of
eligible covered employees not retained by the contractor or subcontractor from
which the contractor or subcontractor shall hire additional employees, if
needed.

7. Within ten days after learning
that a contractor's service contract is to be terminated, the contractor shall
provide to the successor contractor and to this state the name, address, date
of hire and employment occupation classification of each employee of the
contractor and subcontractor who is working pursuant to the terminated service
contract.� If the contractor has not learned the identity of the successor
contractor, the contractor shall request the identity from this state.� For the
purposes of this section, If only a subcontract of a service contract has been
terminated, the terminated subcontractor is deemed a predecessor contractor.

8. The contractor agrees to include
this section in all subcontracts with subcontractors, sublicensees or
sublessees that perform labor or services in connection with the contractor's service
contract.� The contractor agrees to require all subcontractors, sublicensees or
sublessees to include this section in all contracts with any third party that
is contracted to perform labor or services in connection with the service
contract.� The contractor shall take action relating to the subcontract as
directed by this state as a means of enforcing the contract, including imposing
sanctions for noncompliance.

9. The contractor may not retaliate,
discriminate or otherwise take any adverse employment action against any
employee because the employee filed a report or complaint with this state or
the contractor alleging violations of this section or otherwise acted to
investigate or alert this state of violations of this section.

B. The department of administration
shall adopt rules to implement this section.

C. For the purposes of this section:

1. "Contractor" means any
person that is a party to a service contract.

2. "Employee":

(
a
) Means any
person who is employed as an employee of a service contractor or subcontractor
who performs or has performed retail, food and beverage, hotel, utility,
airline catering, Janitorial or health care services under the authority of a
service contract for at least twelve months preceding the termination of the
service contract.�

(
b
) Does not
include a person who is a managerial, supervisory or confidential employee or
the employee of any airline.

3. "Person" means any
individual, proprietorship, partnership, joint venture, corporation, limited
liability company, trust, association or other entity that may employ
individuals or enter into contracts.

4. "Predecessor contract":

(
a
) Means a
service contract in which the service to be performed is substantially similar
to the successor contract.

(
b
) Includes a
service contract that is a public lease or license and that is substantially
similar to a public lease or license that was recently terminated by any of the
following:

(
i
) The
completion of the service contract.

(
ii
) The early
termination of the service contract in whole or in part.

(
iii
) An
amendment that reduces services provided under the service contract in whole or
in part.

5. "Service Contract" means
any contract, lease or license issued or signed by this state granting the
right to provide any retail, food and beverage, hotel, utility, airline
catering, janitorial or health care services on behalf of this state, on state
property or in connection to operations on state property.

6. "State":

(
a
) Means this
state or any agency, state governmental unit or political subdivision of this
state.

(
b
) Includes
public education institutions.

(
c
) Does not
include public hospitals.

7. "Subcontractor":

(
a
) Means an
entity that has a direct contract with a contractor for all or any portion of
the work that is the subject of a service contract.

(
b
) Includes
sublessees and sublicensees.

8. "Successor contract":

(
a
) Means a
service contract where the service to be performed is substantially similar to
the service contract recently terminated.

(
b
) Includes:

(
i
) The
completion of a service contract.

(
ii
) The early
termination of a service contract in whole or in part.

(
iii
) An
amendment that reduces services provided under a service contract in whole or
in part.
END_STATUTE