Campaign to boost minimum wage for tipped workers begins in Arizona
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A lower minimum wage for tipped employees would be a thing of the past under a proposed initiative that advocates are hoping to put on the 2024 ballot.
- An organization called Raise the Wage AZ is behind the proposal.
- The driving force behind the campaign is a national coalition called One Fair Wage that's dedicated to ending lower hourly rates for tipped employees, disabled people, incarcerated people and youth.
Details: Tipped employees can currently be paid $3 an hour less than the minimum wage. The One Fair Wage Act would increase the minimum — which is currently $12.80 — by $1 per year in 2025 and 2026, while gradually phasing out the lower wage for tipped workers by 2027.
- Arizona's minimum wage also increases by the cost of living each year.
- Jim Barton, an attorney who represents the campaign, tells Axios that the group is focused on tipped employees because the current system is often unfair to them.
- Employers are supposed to pay workers the minimum wage if their tips aren't enough to offset their lower base pay, but many employers fail to do so, Barton says.
What they're saying: "It's a place where we see sort of people being exploited," Barton says of the sub-minimum wage for tipped employees. "It's an unfair gap in the policy right now that needs to be closed."
Catch up quick: The state's minimum wage is currently set to rise to $13.85 next year, according to the Industrial Commission of Arizona.
- Voters in 2016 approved a ballot measure that gradually raised it to $12 by 2020, with annual cost-of-living increases after that.
The other side: Arizona Chamber of Commerce president and CEO Danny Seiden called the proposal the "diner destroyer act of Arizona."
- Seiden tells Axios that it would hurt small businesses and likely lead to fewer tipped employee positions and increased costs for consumers.
- Due to high unemployment and labor shortages, many restaurants and other businesses that rely on these workers are offering generous pay and bonuses, he says.
- The chamber doesn't have an official position on the measure yet but has opposed minimum wage increases in the past, and Seiden says it's likely to oppose it, including through possible legal challenges.
Zoom out: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington are the only states that don't permit lower minimum wages for tipped workers, according to the U.S. Department of Labor.
- The federal minimum wage is $7.25 but only $2.13 for tipped employees.
What we're watching: Initiative campaigns don't normally begin so early, but Barton says Raise the Wage AZ filed its proposal with the secretary of state on Nov. 7 so it could send its volunteers out to collect signatures on Election Day.
- State law mandates that signatures be collected within 24 months of the election in which the initiative would be voted on.
- The next general election will be on Nov. 5, 2024.
- The campaign will need to collect nearly 256,000 signatures to qualify for the ballot, though that number is not yet official.