Restaurants Challenge $18 Minimum Wage Hike in Arizona, Aim to Block November Ballot

The Arizona Restaurant Association has filed a lawsuit to prevent a ballot initiative that aims to raise the state’s minimum wage to $18. The association argues that the union-backed group, Raise the Wage AZ, did not collect enough valid signatures to qualify for the November ballot.

Raise the Wage AZ has been collecting signatures for the “One Fair Wage Act” since November 2022. This measure proposes to increase the minimum wage from $14.35 to $18 per hour, with annual adjustments for inflation. Additionally, it seeks to gradually elevate the minimum wage for tipped employees, ultimately eliminating the lower wage that businesses currently pay these workers.

To qualify for the ballot, the measure requires 255,949 valid signatures. The group submitted 354,278 signatures earlier this month, according to the Secretary of State’s Office. County recorders are now tasked with validating these signatures.

A competing ballot measure, proposed by the Arizona Legislature and supported by the Arizona Restaurant Association, aims to allow restaurants to pay tipped workers 25% less than the minimum wage. This measure, formally known as the “Tipped Workers Protection Act,” passed the Senate with a 16-12 vote, supported exclusively by Republicans, and cleared the House of Representatives with a 35-24 vote.

Currently, Arizona law permits restaurants to pay tipped workers $3 less than the minimum wage, provided that tips make up the difference. The restaurant-backed measure would enable employers to pay tipped workers 25% less than the minimum wage, as long as tips increase their earnings to at least $2 more per hour than the minimum wage.

Opponents of the restaurant-backed measure argue that its title is misleading and unconstitutional, claiming it does not protect tipped workers. On the other hand, the Arizona Restaurant Association’s lawsuit against Raise the Wage AZ alleges discrepancies in the number of signatures collected and asserts that many were from non-Arizona voters or unregistered petition circulators.

Steve Chucri, president & CEO of the Arizona Restaurant Association, expressed confidence that the initiative would fall short of the required number of valid signatures. He stated that the petitions were rife with errors, including unregistered voters and improperly notarized documents.

Jim Barton, an attorney representing Raise the Wage AZ, remains optimistic that even if some signatures are invalidated, there will still be enough to qualify for the ballot. Barton questioned the data sets used by the Arizona Restaurant Association for their analysis.

The judge must rule soon, with the deadline for ballot printing on August 22. Barton expects a decision by mid-August. The two competing initiatives reflect a broader national debate over minimum wage increases, facing strong opposition from business groups.

Opponents of the wage increase point to past examples, such as a 2022 measure in Washington, D.C., that guaranteed minimum wage for tipped workers. This measure faced significant backlash, including an astroturfed campaign and added surcharges by restaurants.

In Arizona, a political action committee named “Save Our Tips” formed shortly before a House Commerce Committee hearing on the ARA-backed measure. This group, linked to the Restaurant Association, did not disclose its affiliations when presenting before the committee. The restaurant staff testifying were employees of ARA member establishments, and one speaker was an ARA board member.