Arizona Proposition 138: Debate on wages of tipped workers

Proposition 138 would allow for tipped workers to be paid 25% less per hour than the minimum wage if any tips received by the employee were not less than the minimum wage plus $2 for all hours worked.

Steve Chucri, President and CEO of the Arizona Restaurant Association, and Jeanne Woodbury, an Associate Lobbyist at Creosote Partners, joined “Arizona Horizon” to discuss the impact of the proposition and how a vote in either direction would affect tipped workers in Arizona.

Chucri argues that Prop 138 is simply trying to modernize the tipping system in Arizona.

“It modernizes our tip credit to put it to a percentage instead of a flat $3 but it also guarantees that tipped workers with tips will make $2 more than the minimum wage, and that’s what Prop 138 does in a nutshell,” Chucri said.

Woodbury disagrees with Chucri’s idea of Prop 138’s benefits.

“I think there is a bigger conversation to be had about tipping and the restaurant industry. We can look at other states that do have one fair wage laws and see that, in general, employment is growing at the same or better rates. The industry is growing at the same or better rates. But none of that is actually on the ballot. Prop 138 is a really simple yes or no question, which is asking should we take the tip credit that we have now and change it to this new idea. What we have now is a $3 credit, moving it to a 25% of minimum wage standard is $3.59 this year. That 59 cents an hour that people are going to be losing adds up to $100 a month and $1,200 a year,” Woodbury said.

A “yes” vote will amend the Arizona Constitution to allow employers to pay employees up to 25% less than the minimum hourly wage if the employer can prove the employee’s wage combined with tips or gratuities is at least $2 more than the minimum wage for every hour worked.

A “no” vote will maintain the current laws regarding minimum wage.