AZ Restaurants Push for Constitutional Amendment to Slash Pay for Servers and Bartenders

In a significant move, Arizona’s restaurant industry is pushing for Proposition 138, which aims to amend the state constitution, permitting employers to pay servers and bartenders 25% less than the minimum wage. Critics warn this could lead to diminished earnings for workers, primarily benefiting restaurant profit margins.

Proposition 138 comes in response to a failed ballot initiative intended to raise the minimum wage and eliminate the allowance for lower pay for tipped workers. This legislative effort to enhance worker pay will be the sole proposal voters consider in the upcoming election. The alternative minimum wage increase was struck down after the restaurant sector challenged the validity of the signatures needed for the ballot.

Under current regulations, Arizona’s minimum wage is set at $14.35, with tipped employees receiving $3 less. If enacted, Prop. 138 would allow establishments to reduce tipped workers’ wages to $3.59 less than the state’s minimum wage, raising concerns over the potential impact on worker income.

Jeanne Woodbury, a lobbyist for Creosote Partners, vehemently opposes the proposition, asserting, “This is transparently bad. The math here just does not check out at all.” She believes a thorough examination of Proposition 138 reveals its detrimental implications for workers.

Despite the seemingly small difference of $0.59 per hour, the cumulative effect could amount to over $1,200 in a year for each full-time tipped worker. As Arizona’s minimum wage rises annually due to inflation adjustments, the implications of such wage reductions will become progressively more pronounced.

To preemptively counteract any substantial changes to tipped workers’ pay, the Arizona Restaurant Association promoted the Tipped Workers Protection Act at the state Capitol. They argue that this amendment would protect minimum wage earnings for workers while effectively minimizing their payroll expenses.

Several proponents of the measure, linked to the Arizona Restaurant Association, publicly endorsed the initiative during legislative discussions without disclosing their affiliations. This affiliation has raised eyebrows among opponents, raising concerns over transparency and authenticity in grassroots support for the measure.

The campaign behind Prop. 138, initially registered under the name “Save Our Tips AZ,” has since been rebranded to “Yes on 138,” yet connections to its previous incarnation remain evident. Similar names have previously surfaced in campaigns across the nation that faced opposition to minimum wage increases.

Critics have also pointed to a parallel between Prop. 138 and past campaigns aimed at eliminating similar pay structures in other jurisdictions, notably in Washington, D.C., where tipped workers were guaranteed minimum wage. That campaign featured opposition depicted as grassroots but was orchestrated by established political interests.

Certain tactics from the D.C. campaign have resurfaced in Arizona, echoing themes of defending tip-based earnings while faltering on addressing pressing wage issues faced by workers. Matthew Benson, spokesperson for the Yes on 138 campaign, shrugged off concerns over potential conflicts, stating that outreach for opinions is standard practice in such initiatives.

Opponents, including former Flagstaff City Council member Eva Putzova, argue that Prop. 138 undermines local control and perpetuates a legacy of inequity tied to America’s past. Putzova indicates that the practice of lower wages for tipped workers has historic roots in discrimination and exploitation.

The conversation surrounding this proposition is critical, especially considering existing issues like wage theft and uneven tip distribution, which can occur under the current system. A federal investigation revealed rampant non-compliance among chain restaurants in properly compensating tipped workers, emphasizing the need for greater scrutiny and protection of employees’ rights.