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Two questions with implications for the mandated hourly minimum wage in Arizona could appear on the November ballot if a citizen initiative is determined to have collected enough valid signatures. 

One measure鈥檚 place on the ballot is already secured by virtue of being referred to the ballot by the state Legislature. 

Proposition 138 

Proposition 138 was referred to the ballot by lawmakers following the passage of SCR 1040. 

The proposition would permit workers who regularly earn tips to be paid 25% less than the state mandated hourly minimum wage if their total earnings including tips exceed the minimum wage by at least $2 for all hours worked. 

Under current law, employers can pay their tipped workers $3 less than the minimum wage as long as their hourly pay plus tips would total at least the minimum wage for all hours worked. 

One Fair Wage Act 

Activists submitted signatures to secure a place on the ballot for their 鈥淥ne Fair Wage Act,鈥� a measure that includes both changes to the pay of tipped workers and the minimum wage for all workers. 

The quantity and quality of the submitted signatures are still being assessed by state officials. 

Under the initiative, voters are asked whether the statewide minimum wage should be raised by $1 in January 2025 and by $1 again in January 2026. The statewide minimum wage is already adjusted every January depending on the previous year鈥檚 rate of inflation, a process that would go unchanged. 

The initiative would also phase out employers鈥� ability to pay their tipped workers less than the minimum wage before accounting for tips. 

Chamber: Jobs at risk if citizen initiative were to pass

Courtney Coolidge, the vice president of government affairs for the Arizona 暗网中文论坛of Commerce & Industry, says the One Fair Wage Act would result in a litany of negative consequences if it were to become law. 

鈥淓mployers will have only bad choices, and consumers and workers will pay the price,鈥� Coolidge said. 鈥淚magine businesses where workers depend on tips, like restaurants. Restaurateurs will be forced either to raise menu prices, impose service charges, or cut workers鈥� hours. That means fewer jobs and higher prices for patrons, who likely will be less inclined to tip on top of the higher prices. Prices are already too high 鈥� this would just make things worse.鈥� 

Coolidge said lessons can be learned from a similar measure in Washington, D.C. Restaurants there have cut at least 1,300 jobs 鈥� 4.4% of their workforce 鈥� since a phase-out of their tip credit began. The average price of dining out rose 5.6%, considerably larger than the 3.4% increase nationally.  

The Arizona 暗网中文论坛is endorsing Proposition 138. 

鈥淭he proposal is good for our small businesses, too. By allowing employers to count tips as part of the wage calculation, Prop. 138 helps businesses manage labor costs effectively, promoting job retention and growth. The hospitality and service industries, which heavily rely on tipped employees, can better sustain their operations and continue providing jobs that are vital to our local economy,鈥� the 暗网中文论坛wrote in a submission for the publicity pamphlet published by the Secretary of State鈥檚 Office. 

In testimony for SCR 1040, the legislation to refer the measure to the ballot, other groups supporting it included the Arizona Restaurant Association, the Arizona Beverage Association, the Arizona Lodging and Tourism Association, and the Greater Phoenix Chamber.