The 2024 Arizona General Election ballot includes more propositions than usual; for Page, it’s 15, including 13 state propositions.

If Proposition 138 passes, it will reduce the minimum wage for tip earners. Currently, Arizona’s minimum wage is $14.35. However, employers can pay tipped workers $3 an hour less, $11.35 if total pay with tips reaches minimum wage. Proposition 138 would change the tip credit from a flat $3 an hour credit to 25% of minimum wage, so could reduce the wage to $10.76.

On the 2024 ballot, Proposition 138 titled  “Proposed amendment to the Arizona constitution by the legislature relating to wages” states, “A ‘yes’ vote shall have the effect of amending the Arizona Constitution to allow employers to pay employees up to 25% less than the minimum hourly wage if the employer can establish that the employee’s wage plus tips or gratuities is at least $2 more than the minimum wage for every hour worked.

“A ‘no’ vote shall have the effect of maintaining the current laws regarding minimum wage.”

The primary driver of Proposition 138 is the Arizona Restaurant Association (ARA). The most vocal opponent is One Fair Wage AZ (OFW).

ARA claims it stopped OFA’s Proposition 212 from getting on the 2024 ballot. Proposition 212 was an attempt to raise the minimum wage in Arizona to $18 per hour. OFA submitted petitions with 354,278 signatures. The group only needed 255,949 names to get on the ballot. OFA’s signature gathering methods may have violated state laws so they withdrew the petitions. Arizona law requires out of state or paid petition circulators to register with the Secretary of State’s Office. ARA attorney Kory Langhofer said if circulators were acting illegally, then the signatures they collect can’t be counted.

ARA’s website said Proposition 138 is a response to OFA’s attempt to raise the minimum wage. “Prop. 138 asks voters to protect the tip credit and tipped workers by changing the tip credit formula from $3 per hour to 25% of the minimum wage and giving it constitutional protections. The measure also increases the guaranteed pay for servers when combining wages and tips from minimum wage to minimum wage plus $2.” In other words, instead of a flat $3 credit for the employer, the 25% formula would increase proportionally to future minimum wages increases.

OFW attorney James Barton said Proposition 138 is a terrible proposal that reduces pay for tipped workers. “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,” said Barton.

Barton, on behalf of OFW, sued the state to keep Proposition 138 off the ballot. His efforts failed, much like the efforts to get Proposition 212 on the ballot.

If the name, James Barton, sounds familiar, it’s because he is also the attorney representing the Page Action Committee and their lawsuit against the City of Page. The attempt failed in both in Coconino County Superior and Appellate courts. The case has since moved to the Arizona Supreme Court. At this time, the higher court hasn’t decided if it will accept the case.

Barton told the court Proposition 138 is being sold as the “Tipped Workers Protection Act” but if passed would mean tipped workers could earn less. “The court has the power to intercede on the people’s behalf when a fraud on the electorate is being perpetrated,” said Barton.

Catherine Sigmon, co-founder of Civic Engagement Beyond Voting, Tempe, and Melinda

Iyer, co-founder and policy director of Civic Engagement Beyond Voting, Phoenix argued against passing Proposition 138:“Tips are optional; a salary is not, which is why some restaurant owners continue to try to avoid paying a living wage to their employees. This measure is yet another attempt by the Arizona Restaurant Association to undermine the Fair Wages and Healthy Families Initiative passed by nearly 60% of voters in 2016. It asks voters to amend the Arizona Constitution to create an even lower sub-minimum hourly wage for tipped employees that is up to 25% lower than statutory minimum wage.

“By law, tipped workers can already be paid $3 less than the minimum wage, but this measure would increase that gap significantly. Similar measures have been pushed by Trump-affiliated or conservative groups in other states and appear to be driven by ‘astroturf’ organizations such as ‘Save Our Tips AZ,’ which is entirely funded by the Arizona Restaurant Association. An investigation conducted by journalists at the AZ Mirror revealed that ‘workers’ who testified in support of the measure were actually high-level employees of restaurants owned by members of the ARA Board. This type of pretense during the lawmaking process is inappropriate and reprehensible.

“Reducing the already sub-minimum wage for tipped employees would further diminish their ability to afford rent or support a family in a state with skyrocketing cost of living. Restaurant workers struggle to afford basic health care and often work multiple jobs to make ends meet. They deserve a living wage in order to afford to put food on their own tables as well as ours.

“We strongly urge a ‘No’ vote on this insidious measure.”

To counter OFW’s opposition to Proposition 138, another political action committee, Save Our Tips AZ  (SOT) was formed. They list their top donors for campaign media spending as the Arizona Restaurant Association, Arizona Chamber of Commerce and Industry and National Restaurant Association. “If Prop. 138 fails and the tip credit is removed, the vibrancy of Arizona’s unique dining scene will be threatened,” SOT claims. “Servers will lose a significant portion of their income, and menu prices will increase. Without the tip credit, your neighborhood restaurant and bar would struggle to make it in such an environment.”

It should be noted that the current $3 tip credit remains unchanged if Proposition 138 fails.  SOT claims are misleading. The measure simply changes the $3 tip credit to 25% of minimum wage if tips amount to at least $2 more than minimum wage.

State Rep. Justin Wilmeth, a supporter of Proposition 138, said, "We all know that the restaurant industry is a very small profit industry. If you have a disparity in a forced raise of costs for a business, they will either shut down, limit staff or make other alternatives.”

It’s up to voters to decide who benefits or loses if Proposition 138 is passed.

For more information, PDF files of for and against arguments for Proposition 138 are available at the Arizona Secretary of State’s website.

https://apps.azsos.gov/election/BallotMeasures/2024/Prop_138_For_Arguments.pdf

https://apps.azsos.gov/election/BallotMeasures/2024/Prop_138_Against_Arguments.pdf