The author states that, in substance, a public sector interest arbitrator exercises delegated legislative authority and, as such, is an agent of the legislature in establishing wages and conditions of employment. The courts have routinely held that public-sector interest arbitrators are public officials. As public officials carrying out delegated legislative power, it necessarily follows that arbitrators have an obligation to give meaning and effect to other legislative enactments such as cap and lid laws: Where a public employer makes aninability-to-pay argument, arbitrators must seriously consider it without placing excessive emphasis upon comparability data; to consider cap and lid laws as limitations on the authority or discretion that an interest arbitrator would otherwise have. The author offers 5 criteria that arbitrators should consider when considering an inability-to-pay claim, and describes the adverse consequences that will flow “if public-sector interest arbitrators fail to fulfill [their] dual responsibility.”