Union-backed groups hoping to kill the tip credit in Arizona said they’ve scrapped efforts to put an initiative on the November ballot that would phase out the employer concession and raise the minimum wage for all workers in the state to $18 an hour.
Raise the Wage AZ and its national affiliate, One Fair Wage, said they’ll instead push for the changes in state labor regulations via legislation.
The groups, both of which are supported by the Service Employees International Union (SEIU), also aired plans to resurrect their initiative next year in hopes of getting it on the 2025 ballots for county and municipal elections.
The groups nonetheless indicated they will step up their lobbying between now and November to defeat a ballot initiative the Arizona Restaurant Association (ARA) has succeeded in clearing for inclusion on the 2024 ballot.
The measure, called the Tipped Worker Protection Act, would allow restaurants and other employers of tipped workers to pay those employees 25% less if gratuities push their hourly incomes at least $2 above the state minimum wage.
Currently, the state’s pay floor is set at $14.35 an hour. Tipped workers can be paid $3 less by their employers if they receive enough in gratuities to bring their incomes up to a weekly average of $14.35 per hour. If not, the employer covers the shortfall.
The $3 break is the tip credit.
The industry-backed proposal was drafted and cleared for inclusion as an alternative to the ballot initiative being pushed by the labor groups. The union advocates filed a lawsuit in June to knock the employer-friendly initiative off the ballot, arguing that the name of the measure made it “deceptive to the point of fraud.”
On Tuesday, a county judge ruled that the industry-backed initiative should remain on the ballot. Proponents of the competing measures were expected to spend millions of dollars in hopes of enabling their proposal to prevail.
Raise the Wage AZ and One Fair Wage announced Thursday that they were withdrawing the signatures they’d submitted to get their proposal before voters. According to the ARA, there were a host of errors in the petitions, and the number of signers fell short by tens of thousands of the 255,949 needed to get the proposal on the ballot.
“The radicals who want to force a new pay structure down the throats of Arizona small businesses and tipped workers were never honest about their true motivations, so I’m not surprised they also lied about their number of signature petitions for the ballot,” ARA CEO Steve Chucri said in a prepared statement.
Instead of pursuing a ballot initiative, the labor groups said they would lobby for a bill that would deliver the same ends. That legislation has been authored by State Representative Mariana Sandoval.
“Over the coming weeks and months, we will turn our attention to mobilizing tens of thousands of service industry workers, and voters of all backgrounds across the state, to support elected officials and candidates who pledge their support,” Saru Jayaraman, the president of One Fair Wage, said in the announcement.
The turn of events marks another defeat for the labor group in its quest to outlaw the tip credit. Industry lobbying thwarted the group’s efforts in 17 states to kill the concession.
Those efforts included gathering signatures to put a ban proposal on the November ballots of four states. The only place where One Fair Wage succeeded was in Massachusetts.
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