Foes Clash Over Ballot Measure’s Impact on Tipped Workers

The Arizona Restaurant Association is facing legal challenges regarding Proposition 138, a measure that aims to modify wage regulations for tipped workers. An attorney for opposition groups claims the proposal is intentionally misleading and should not proceed to voters.

James Barton argued before the Arizona Supreme Court that the measure, marketed as the “Tipped Workers Protection Act,” misrepresents its true impact. He contended that instead of providing protections, the proposition could allow restaurants to pay their tipped employees even less than current wages.

Barton emphasized, “The court has the power to intercede on the people’s behalf when a fraud on the electorate is being perpetrated.” His legal arguments had previously been dismissed by Maricopa County Superior Court Judge Peter Thompson, who ruled that the proposal’s title does not inherently mislead voters and could be interpreted as beneficial for tipped workers.

Under existing law, tipped workers receive a minimum wage of $14.35, which increases annually. Currently, employers can pay these workers as little as $11.35 per hour, provided their total compensation meets the minimum wage when tips are included. Proposition 138 would alter this by increasing the employer’s credit for tips to 25% of the minimum wage, potentially lowering the wage to $10.76.

Steve Chucri, president of the Arizona Restaurant Association, countered that no worker would earn less than they do currently. He pointed out that the 25% tip allowance applies only to workers who earn sufficient tips, ensuring they bring home at least $16.35 an hour.

However, Barton warned that if workers do not earn at least $5.59 in tips, they would receive only the current rate of $11.35, leaving them no better off. He criticized the act’s title, asserting it misleadingly implies an improvement in protections for these workers.

Barton’s challenge is backed by the advocacy group Raise the Wage AZ, which previously sought to increase the minimum wage by $1 per hour in January and an additional $1 in 2026, while phasing out the existing tip credit. After the Arizona Restaurant Association sued, proponents of the wage increase admitted they likely fell short of required signatures, effectively ending that campaign.

Despite challenges, the Restaurant Association successfully pushed for Proposition 138 to appear on the ballot, a move which prompted further legal action from Raise the Wage AZ based on claims of misleading titles. Barton previously faced setbacks in court, but he maintains that the incorporation of the title “Tipped Workers Protection Act” into the proposal was meant to deceive voters.

In defense of the proposition, the Arizona Restaurant Association claims lowering labor costs will create a more sustainable wage structure, which the industry argues will help retain tipped workers’ jobs in light of economic pressures. Judge Thompson ruled that such arguments were sufficient to allow voters to decide on the measure.

The Arizona Supreme Court is expected to soon determine whether Proposition 138 will remain on the ballot, a decision that could have lasting implications for tipped workers across the state.