Arizona's Strides Towards Minimum Wage Law Revisions; Here's All You Need To Know

Arizona's Strides Towards Minimum Wage Law Revisions; Here's All You Need To Know
Cover Image Source: Minimum Wage Laws | Photo by Rene Asmussen | Pexels

Tuesday's vote by state lawmakers ratified a proposal to amend the Arizona Constitution, aiming to allow restaurants to pay their tipped workers even less than current rates. Advocates argue that this adjustment could potentially result in higher overall earnings for wait staff. The proposal, known as SCR 1040, primarily aims to counter an initiative seeking to raise the minimum wage beyond what Arizona voters have twice approved.

A hand holding coins | Getty Images | Photo illustration by Christopher Furlong
Image Source: A hand holding coins | Getty Images | Photo by Christopher Furlong

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Currently, Arizona law mandates annual increases to the minimum wage to keep pace with inflation, setting it at $14.35 per hour. However, restaurants can pay tipped workers $3 less per hour, provided their total earnings meet the minimum wage threshold.

Efforts to Alter Wage Policies

A national organization affiliated with "One Fair Wage" is gathering signatures to phase out tip-based payments entirely by 2027. Alongside inflation-linked raises, they propose a $2 per hour increase in the minimum wage over two years, potentially raising it to $18. This contrasts with the current law, which allows restaurants to pay $11.35 per hour to tipped workers.

Steve Chucri, CEO and president of the Arizona Restaurant Association, expressed concern over this initiative. "And then there was predictive scheduling and paid time off and all these other things," he said. "It’s just never enough."

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To address the issue, Chucri presented a plan in the state House to allow restaurant employees to be paid 25% less than the minimum wage, effectively $13.50 per hour if the minimum wage was $18.

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Guaranteed Minimum Wage Plus $2

To garner public and employee support, Chucri's proposal ensures that every employee would still receive at least $2 more per hour than the minimum wage. Thus, if the minimum wage were $18, workers would earn $20 per hour.

He anticipates that most wait staff would offset the difference with their tips, resulting in savings for restaurants by only having to pay $13.50 per hour.

Cover Image Source: Unsplash | Dan Smedley
 Image Source: Unsplash | Photo by Dan Smedley

Chucri's Persistent Opposition

Chucri's organization has long opposed Arizona's minimum wage laws, dating back nearly two decades. Despite their efforts, initiatives to increase the minimum wage have been backed by voters. Since 2009, the federal minimum wage has remained at $7.25.

His opposition to the current initiative doesn't necessarily imply a lack of voter support for raising the minimum wage, as he doubts the initiative's ability to gather sufficient signatures by the July 3 deadline.

Financial Backing for the Initiative

One Fair Wage appears to have ample funding to collect signatures, supported by various foundations and the Alliance for a Just Society. Chucri opposes this initiative, citing concerns beyond just the minimum wage, such as scheduling and time off.

Cover Image Source: Pexels | RDNE Stock project
Image Source: Pexels | Photo by RDNE Stock project

Restaurant workers hold differing views, with some reporting decent earnings and others worrying about potential consequences of wage hikes, like price increases or layoffs.

Rep. Justin Wilmeth supports aiding eateries financially, fearing layoffs or closures if they're required to pay more. "We all know that the restaurant industry is a very small profit industry," he said during a debate. "If you have a disparity in a forced raise of costs for a business, they will either shut down, limit staff, or make other alternatives."

Furthermore, Rep. Analise Ortiz, D-Phoenix, highlighted shortcomings in SCR1040, noting no assurance that workers will receive the promised minimum wage plus $2. 

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