In this episode of the Better Together Arizona podcast, ONE Community President & Co-Founder Angela Hughey is joined by Executive Director of the Arizona Citizens Clean Elections Commission, Tom Collins.
Angela and Tom discuss AZ Prop 138, a 2024 Arizona ballot initiative about how tipped workers are paid across the state. Prop 138 would allow tipped workers in Arizona to be paid 25% less than the minimum wage if income from tips passes a certain threshold.
Currently, tipped workers are paid $3 less than minimum wage workers. Prop 138 would lower tipped workers wages slightly more if the employer can establish that the employee ultimately received the minimum wage plus $2 for every hour worked.
❌ Arguments against Prop 138: The Tipped Workers Protection Act (TWPA) preserves the tip credit and increases the base pay an additional $2 per hour for tipped employees, helping keep costs under control while increasing the guaranteed pay for frontline workers. Without the tip credit, restaurants would be forced to raise prices or add service charges, which would fuel inflation and discourage dining out.
✅ Arguments for Prop 138: Prop 138 lowers the amount of money that employers of tipped workers must pay. Instead of a flat $3 credit, this allows employers to pay 25% less, leaving consumers to fill in the gap.