The group behind a ballot measure that aims to ask Arizonans in November to raise the minimum wage and do away with the lower wages paid to employees who receive tips is suing over a competing measure passed by the legislature that would decrease wages for tipped workers.
The measure, which was brought to the legislature by the Arizona Restaurant Association, would allow restaurants to pay tipped workers 25% less than minimum wage. After being previously voted down in the Senate, Senate Concurrent Resolution 1040, also known as the “Tipped Workers Protection Act,” finally passed on June 12, one of the jam-packed last days of this year’s legislative session, by a vote of 16-12, with only Republicans voting in favor.
The measure received support from all Republicans and a few Democrats when it passed through the House of Representatives by a vote of 35-24 in April.
Currently, state law allows restaurants to pay tipped workers $3 less than minimum wage and use the workers tips to backfill up to the minimum wage. If approved, the ballot measure backed by restaurant owners would allow employers to pay tipped workers 25% less than minimum wage — as long as they make at least $2 per hour more than the minimum wage with tips included.
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In April, Rep. Analise Ortiz, D-Phoenix said she felt bamboozled by a group promoting SCR1040 after multiple people wearing “Save Our Tips” shirts endorsed the legislation in front of the House Commerce Committee in March. Those advocates of the act failed to disclose to the committee that they were either members of the Arizona Restaurant Association or were upper management — and not servers — at restaurants owned by ARA board members.
The political committee Raise the Wage AZ has been gathering signatures for a ballot measure called the “One Fair Wage Act” since November 2022. The measure would raise the state minimum wage from $14.35 to $18 per hour. It would also incrementally lower the amount of a worker’s tips restaurants could use to reconcile their wages with the state minimum, until eventually employers would have to pay all workers the state minimum wage, regardless of whether they receive tips.
Raise the Wage AZ attorney Jim Barton wrote in the June 19 lawsuit that the title of the legislature’s ballot measure is misleading, and therefore unconstitutional, because it does nothing to protect tipped workers.
“Having two measures on the ballot — one that increases wages paid to tipped workers and one that decreases wages paid to tipped workers — is likely to lead to voter confusion,” Barton wrote.
Barton alleged that calling the restaurant-backed proposal the “Tipped Workers Protection Act” is “materially misleading, such that it creates a substantial danger of fraud, confusion, and unfairness,” in violation of the state constitution.
Arizona’s Bill Drafting Manual says that bills “must state the subject of the legislation with sufficient clarity to enable persons reading the title to know what to expect in the body of the act.”
Raise the Wage AZ wants a Maricopa County Superior Court judge to declare that the resolution violates the state constitution to bar the secretary of state from certifying it to be placed on the November general election ballot.
“SCR 1040’s title is misleading to the point of fraud, and creates a significant danger of electorate confusion and unfairness, because it is likely to mislead voters to believe that it will protect tipped workers, when in fact, it exploits tipped workers by subjecting them to an even lower minimum wage than the current subminimum wage that they can be paid and by adding it to the constitution,” Barton wrote.
In response to the court challenge, the ARA put out a statement saying that the “One Fair Wage” act would change the tipping system in Arizona in a harmful way.
“This Hollywood-funded, out-of-state group arrogantly seeks to dictate to thousands of Arizona tipped workers that it knows best how they should be compensated — ignoring that a large majority of restaurant workers prefer the current compensation structure and don’t want it to change,” Steve Chucri, president and CEO of the ARA said in the statement. “One Fair Wage is a giveaway to the union bosses driving the effort, but would hike costs for Arizona families and be a job killer for Arizona restaurants and small businesses. If this initiative actually qualifies for the ballot, we are confident Arizonans will not be fooled by its deception.”
He added that the Tipped Workers Protection Act is a better alternative that would “protect tipped workers’ pay, preserve jobs and save Arizona small businesses.”
Raise the Wage has not yet turned in signatures to get its measure on the ballot, but plans to do so on July 3.