Supreme Court Upholds Ballot Measure Challenging Tipped Workers’ Pay Claims

The Arizona Supreme Court has upheld the inclusion of Proposition 138, the “Tipped Workers Protection Act,” on the ballot for the upcoming November election.

In June, the measure faced legal challenges from Raise the Wage AZ, a political action committee focused on increasing the minimum wage. Their lawsuit contended that the ballot proposition, crafted by Republican state lawmakers, was misleading, claiming it could confuse voters and foster unfairness.

Raise the Wage AZ sought a court ruling to prohibit the proposed constitutional amendment from appearing on the ballot, arguing it violated the Arizona Constitution. Although a lower court favored Prop 138, the case was escalated to the Arizona Supreme Court, which ultimately confirmed its place on the ballot.

Initially formed to support a minimum wage increase for the 2024 ballot, Raise the Wage AZ’s proposal failed to meet the necessary requirements for inclusion.

Current Arizona law permits restaurants to pay tipped employees $3 below the minimum wage, utilizing tips to supplement their earnings. Should voters endorse Prop 138, businesses may pay tipped workers up to 25% below minimum wage, contingent on their hourly wage and tips exceeding $2 more than the minimum wage.

Steve Chucri, President and CEO of the Arizona Restaurant Association, expressed gratitude for the ruling, asserting that Prop 138 aims to safeguard the earnings and employment of Arizona’s servers and tipped workers. “We thank the Arizona Supreme Court for ruling in our favor and letting Arizona voters have their say on Prop 138,” he stated.

This measure was propelled to the legislature by the Arizona Restaurant Association, which also formed an additional group of purported tipped workers advocating for the proposition’s ballot placement. However, connections to the ARA were not disclosed by spokespeople representing this advocacy group.

Contrastingly, Jim Barton, an attorney for Raise the Wage AZ, criticized the court’s ruling, suggesting it enables businesses to mislead voters regarding labor compensation. “It is called the Tipped Worker Protection Act, and it LOWERS tipped workers’ wages. It never raises their wages. It never provides them any protection,” he explained. He warned voters to be cautious about misleadingly titled legislation.