Two groups are going head-to-head in Arizona in a battle over workers’ rights, minimum wage laws, and employer responsibility.
Amendment to State Constitution
On Tuesday, Arizona lawmakers voted in favor of a proposal to amend the Arizona Constitution in order to revise minimum wage laws for restaurant workers.
Tipped Workers Protection Act
The proposal, which is titled SCR 1040 and also called the Tipped Workers Protection Act, is being pushed by advocates who want to give restaurant employers the legal right to pay their tipped workers even less than what they already pay.
‘One Fair Wage’
These advocates, which include the Arizona Restaurant Association, are pushing to divert the efforts of ‘One Fair Wage.’
A Nationwide Initiative
This is a nationwide initiative working toward ending the tip-based economy in the next three years, as well as providing consistent raises to meet inflation and raising the minimum wage by $2 per hour in the next two years.
Arizona Minimum Wage
Arizona’s minimum wage is $14.35 an hour, and under current laws, the state is compelled to revise it once a year to ensure it matches inflation.
Different for Tip Workers
This does not apply to tipped restaurant workers, whose employers are able to pay them $3 below minimum wage, as long as tip-based income brings their take-home pay up to minimum wage levels.
Eventually, $18 Per Hour
Under the “One Fair Wage” proposal, which Arizona voters have approved twice, the minimum wage in Arizona could increase to $18 per hour by 2026.
Provisions for Tip Workers
The initiative would also give extra provisions to restaurant workers, ensuring that they would also be paid an $18 minimum wage rate regardless of how much they take home in tips, which is what has outraged restaurant and hospitality employers.
Protecting Business Interests
With the SCR 1040, they are explicitly moving to protect their businesses against the “One Fair Wage” movement.
25% Lower
If SCR 1040 is passed into law, restaurant owners would be able to pay employees 25% below minimum wage.
Working Against the Initiative
This would allow some employers to circumvent the most costly impacts of a successful “One Fair Wage” bill. Even if the minimum wage was raised to $18, tip-earners would only make $13.50.
Less Than They Pay Now
Based on the current minimum wage of $14.35, restaurant employers would only have to pay workers approximately $10.80 per hour, more than 50c less than they currently pay.
Arguments for the Act
Proponents argue that this new amendment to state law could result in higher employee earnings.
Some also argue that fair-wage and pro-worker initiatives have gone too far in the state.
Arizona Restaurant Association
One of these people is Steve Chuchri, the CEO of the Arizona Restaurant Association and the man who pushed the Arizona State House to put the new proposal to vote.
His organization has been fighting against minimum wage increases for decades.
“Never Enough”
“There was predictive scheduling and paid time off and all these other things,” he said. “It’s just never enough.”
Tips Will Make the Difference
Chuchri has appealed to voters by arguing that higher tips would make up the difference for wait staff, bringing their take-home pay to $20 an hour, $2 more than the “One Fair Wage” proposed minimum wage. It would also relieve strain on business owners.
Arizona Chamber of Commerce
The Arizona Chamber of Commerce also championed the proposal on social media, writing, “Thanks to AZ House Commerce for passing SCR 1040[…]This bill strikes a balance that benefits both businesses & workers.”
“A Win-Win”
The Chamber described it as “providing employers with flexibility & ensuring fair compensation for workers. A win-win for AZ’s economy & workforce.”
A Necessary Financial Break?
The sponsor for the proposed legislation, Rep. Justin Wilmeth, R-Phoenix, argued that restaurants need a financial break.
“If you have a disparity in a forced raise of costs for businesses, they will either shut down, limit staff, or make other alternatives,” he told the House on Tuesday.
Others Speak Out
Rep. Analise Ortiz, D-Phoenix, argued that there was no guarantee that wait staff pay would equal minimum wage under the legislation, let alone net them an extra $2 an hour.
“The Rich Get Richer”
She argued that employees would be taken advantage of” and that the legislation would only serve to “ensure that the rich get richer and the working class people will be taken advantage of by the 1%.”
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
