In November, voters will decide how much restaurants must pay tipped workers.
Proposition 138 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.
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The change would mean employers would have to pay tipped workers 25% below the current $14.35 per hour state minimum wage.
The Arizona Restaurant Association said the measure is two-fold.
It also requires employers to ensure their workers ultimately earn two dollars above the minimum wage after tips, while the current law only ensures minimum wage.
“A model that works well for restaurants that will keep menu prices down, will keep tipped workers happy and tipped workers well employed,” AZ Restaurant Association President Steve Chucri said.
The organization One Fair Wage has criticized the motion and tried to get another ballot measure by eliminating the tip credit and increasing the minimum wage to $18 per hour.
That effort was pulled from consideration this week after a legal challenge surrounding the number of signatures needed to get on November ballots.
The Arizona Restaurant Association also argued that getting rid of the current tipping structure would drastically increase consumer costs.
One Fair Wage President Saru Jayaraman said in a statement Thursday that the organization will turn its attention to advancing candidates who support similar measures.
Saru also addressed Proposition 138 saying, “This sham initiative is nothing more than a shameless attempt to trick voters into cutting the wages of tipped service industry workers across the state by 25 percent.”
