Voters in Arizona to decide ballot measure on changing minimum wage for tipped workers

Voters in Arizona will decide on a constitutional amendment to allow businesses to pay tipped employees 25% less per hour than the minimum wage.

The amendment would allow for tipped workers to be paid 25% less per hour than the minimum wage if any tips received by the employee were not less than the minimum wage plus $2 for all hours worked. Currently, businesses in Arizona can pay tipped workers $11.35, which is $3 less than the current minimum wage of $14.35, as long as their take-home pay, including tips, amounts to the minimum wage. Under this new amendment, businesses would be able to pay workers $3.58 (25%) less than the current minimum wage of $14.35, which is $10.77, provided that the total take-home pay of each worker is at least the hourly minimum wage plus $2 for each hour worked.

The amendment, Senate Concurrent Resolution 1040 (SCR 1040), was introduced on Feb. 5, 2024. It passed the Senate on March 12, but it was amended in the House to pertain to tipped workers and passed on April 3, 2024, by 35-24, with 31 Republicans and 4 Democrats voting for the amendment and 24 Democrats voting against it. It passed the Senate again on June 12, 2024, by 16-12, with all Republicans voting for the amendment and all Democrats opposed.

State Rep. Justin Wilmeth, who sponsored SCR 1040, said, “We all know that the restaurant industry is a very small profit industry. If you have a disparity in a forced raise of costs for a business, they will either shut down, limit staff or make other alternatives.”

Jim Barton, an attorney for One Fair Wage AZ, an initiative campaign working to put a minimum wage initiative on the 2024 ballot in the state, opposed the amendment, saying, “If they’re saying that the restaurants need to use the tips that the servers earn to cover their responsibility to pay the worker, then that restaurant’s not a very good business … Businesses can afford to pay their workers a fair share. And there is no reason why the boss should get to take credit for the tip that the server earns.”

According to Barton, One Fair Wage AZ, the campaign supporting the initiative to raise the minimum wage in Arizona to $18 per hour, proponents are on track to submit enough signatures by the July 3 deadline to qualify the measure for the ballot in 2024.

Arizona voters previously decided on minimum wage measures in 2006 and 2016. In 2006, voters approved Proposition 202 by 65.37%-34.63%, which established a state minimum wage of $6.75 an hour (previously, Arizona did not have a state minimum wage deferred to the federal minimum wage, which was $5.15 an hour in 2006). In 2016, Arizona voters approved Proposition 206 by 58.33%-41.67%, which raised the minimum wage to $10 in 2017, and then incrementally to $12 by 2020, and created a right to paid sick time off from employment.

From 1996 to 2022, there were 28 minimum wage increase measures on the ballot. Voters approved 26 (92.86%) and rejected two (7.14%). In 2024, minimum wage initiatives qualified for the ballot in Alaska and California.

Arizona voters will be deciding on 11 ballot measures in 2024. All were referred to the ballot by the Arizona state legislature. They are:

• Legal Challenge to Initiative Amendment: Would provide for challenges to an initiative measure or constitutional amendment after the filing of the measure with the secretary of state
• Criminal Conviction Fee for First Responder Death Financial Benefit Measure: Would establish a $20 fee on every conviction for a criminal offense, which would go to pay a benefit of $250,000 to the family of a first responder who is killed in the line of duty
• Emergency Declarations Amendment: Would provide for the legislature to terminate a state of emergency or alter the emergency powers of the governor during the state of emergency
• End Term Limits and Retention Elections for Supreme Court Justices and Superior Court Judges Amendment: Would end term limits for state supreme court justices and superior court judges, replacing them with terms of good behavior, unless decided otherwise by a judicial review commission, and would end retention elections at the end of the judicial term
• Immigration and Border Law Enforcement Measure: Would allow for state and local police to arrest noncitizens who cross the border unlawfully, allow for state judges to order deportations, require the use of the e-verify program for some public governmental programs and employment eligibility purposes, and make the sale of fentanyl a Class 2 felony if a person knowingly sells fentanyl resulting in the death of another person
• Legislative Ratification of Rules that Increase Regulatory Costs Measure: Would prohibit a proposed rule from becoming effective if that rule is estimated to increase regulatory costs by more than $500,000 within five years after implementation, until the legislature enacts legislation ratifying the proposed rule
• Life Imprisonment for Sex Trafficking of a Child Measure: Would provide for life imprisonment for an individual who is convicted of sex trafficking of a child
• Property Tax Refund for Non-Enforcement of Public Nuisance Laws Measure: Would allow for property owners to apply for a property tax refund in certain circumstances, including in instances if the city or locality in which the property is located does not enforce laws regarding illegal camping, loitering, obstructing public thoroughfares, panhandling, public urination or defecation, public consumption of alcoholic beverages, and possession or use of illegal substances
• Require Partisan Primaries and Prohibit Primaries Where Candidates Compete Regardless of Party Affiliation Amendment: Would require partisan primaries for partisan offices, meaning that members of political parties nominate their own candidates at primaries for general elections
• Signature Distribution Requirement for Initiatives Amendment: Would create a signature distribution requirement for citizen-initiated ballot measures based on state legislative districts
• Wages for Tipped Workers Amendment: Would allow for tipped workers to be paid 25% less per hour than the minimum wage if any tips received by the employee were not less than the minimum wage plus $2 for all hours worked