Arizona’s Minimum Wage: Contrasting Ballot Measures Could Impact State Pay Rates

Quick Hits

• An advocacy organization recently submitted signatures to put forth a ballot measure to raise the state minimum wage to $18 per hour.
• Arizona voters will decide a separate ballot measure to alter way the minimum wage is calculated for tipped workers.
• If passed by voters, both measures would take effect immediately.

Arizona voters appear poised to decide on two wage increases via voter ballot initiatives in November. Raise the Wage Arizona, an advocacy group that supports a higher minimum wage, proposed a ballot measure that would increase the state minimum wage from $14.35 to $18 per hour by 2026, and continue to raise the minimum wage based on the consumer price index. If enough signatures are verified, this measure will appear on the ballot on November 5, 2024.

Another measure has already been approved for the November ballot. If passed, it will allow employers in Arizona to pay tipped workers $10.76 per hour (or 25 percent less than the minimum wage), as long as the workers earn at least $2.00 per hour more than the minimum wage with tips included. Under current law, an employer may pay a tipped employee $11.35 per hour, if the tipped employee earns at least $14.35 per hour with wages and tips combined.

Arizona Senate Concurrent Resolution 1040, also called the Tipped Workers Protection Act, matches the ballot measure on tipped workers. The bill passed the legislature but Governor Katie Hobbs has not signed or vetoed it yet.

On June 19, 2024, Raise the Wage Arizona sued the state, claiming the legislation has a deceptive and misleading title because it does not provide any protection for tipped workers.

“In the vast majority of circumstances, tipped workers will make less money under SCR 1040 because the employer’s contribution will go down, and the worker’s tips will remain unchanged,” the plaintiffs stated in the lawsuit. “Under no circumstances will the tipped worker make more money under SCR 1040 than under current law.” They asked the court to take the measure off the ballot.

The Arizona Restaurant Association has stated that raising the minimum wage would increase prices for consumers and shrink the number of jobs in the restaurant industry.

Next Steps

Arizona voters will weigh in on the tipped worker ballot measure on Election Day, November 5, 2024. They also could be presented with another ballot measure to raise the minimum wage to $18.00.

The Arizona Superior Court of Maricopa County is expected to rule later this year on the case challenging the legality of Senate Continuing Resolution 1040, which applies to tipped workers.

Ogletree Deakins’ Phoenix office will continue to monitor developments and will provide updates on the Arizona and Wage and Hour blogs as additional information becomes available.

Nonnie L. Shivers is a shareholder in the Phoenix office of Ogletree Deakins.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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