What is Happening?
A Group called One Fair Wage (OFW), an outside special interest group, from New York and California turned in signatures to pass a voter initiative, known as the One Fair Wage Act, that would raise the minimum wage by $2 above the current CPI formula over the next two years and eliminate the tip credit through a phase out over the next three years. The Arizona Restaurant Association was successful in suing OFW and preventing their initiative from reaching the ballot in 2024.
However, even with OFW being kicked off the ballot, there is nothing to stop them from trying again, and they have already committed to targeting specific cities and counties in Arizona in 2025. That is why the restaurant industry and restaurant employees joined together to submit Prop. 138 to the ballot. Prop. 138, the Tipped Workers Protection Act will preserve the tip credit.
What Does Prop 138 Do?
Prop. 138 asks voters to protect the tip credit and tipped workers by changing the tip credit formula from $3 per hour to 25% of the minimum wage and giving it constitutional protections. The measure also increases the guaranteed pay for servers when combining wages and tips from minimum wage to minimum wage plus $2.
