Arizona voters could see two different minimum wage measures on their ballot in November.
State lawmakers are considering Senate Concurrent Resolution 1040, a constitutional amendment that would alter the minimum wage for Arizona's tipped workers by changing the state's tip credit from a flat $3 to a percentage.
The tip credit is the amount under the minimum wage that employers can pay tipped workers, with tips making up the difference.
Separately, One Fair Wage AZ is gathering signatures for a ballot initiative that would raise the minimum wage to $18 – and do away with the state’s tip credit entirely.
Servers such as Sultan Stipho, who works at a restaurant in north Scottsdale, worry about what would happen to the restaurant industry without a tip credit.
“Tip credit is what allows us to have our jobs as servers,” he said. “I'm not sure if a restaurant could pay as many of us the same wage that they'd pay other kinds of employees who aren't tipped.”
Jim Barton, an attorney for One Fair Wage AZ, called the proposed constitutional amendment a “terrible proposal” that reduces the pay of tipped workers.
“Well, 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,” he said.
SCR 1040 would change the tip credit to up to 25%, meaning it would adjust with the minimum wage, which in Arizona rises annually with the cost of living.
Under today’s hourly minimum wage of $14.35, the tip credit in SCR 1040 could be as high as $3.59, which is 19.7% higher than the current $3 tip credit.
“Opponents of this are trying to suggest that that's that we're cutting people's pay,” said Steve Chucri, Arizona Restaurant Association president and CEO. “We're not.”
In addition to pegging the tip credit to the minimum wage, the measure would also require employers to pay tipped workers at least $2 more than the hourly minimum wage once tips are added in.
Stipho said he fears restaurants will add service charges, raise menu prices or hire fewer workers if they no longer have a tip credit.
“This is a commission-based job,” he said. “You don't tell a salesperson, ‘I'm gonna give you a higher hourly rate.’ No, that's just not how it works.”
Stipho also said raising the minimum wage and ending the tip credit should be considered separately, not together like in One Fair Wage’s proposed ballot measure.
For One Fair Wage, doing away with the tip credit is just a matter of fairness.
“Businesses can afford to pay their workers a fair share,” Barton said. “And there is no reason why the boss should get to take credit for the tip that the server earns. It's not fair. There's no reason for it.”
SCR 1040 was introduced as a strike-everything amendment in the House of Representatives last month. If both the House and Senate pass it, the measure will go to voters in November.
Barton said One Fair Wage AZ is on track to gather enough signatures by the state’s July deadline to get their proposal on the ballot.
What happens if both measures win in November?
“Then we'll have to see which one gets more [votes],” Barton said. “And then ultimately, the courts will decide whether they're in conflict with each other.”
