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Measure to lower mandated pay for tipped workers moves closer to Arizona ballot

Arizona lawmakers preliminarily approved a resolution Tuesday that would ask voters to amend minimum-wage law for workers who earn tips.

Minimum wage is currently $14.35, but employers can pay tipped staff $3 below that. 

Employers would have to show that those workers end up making $2 an hour more than the minimum wage through tips. 

If passed, businesses could pay tipped staff about 25% below the minimum wage. That would be about 60 cents less per hour than employers already can pay tipped workers, shifting a higher portion of staff compensation to customers.

Republican state Rep. Justin Wilmeth sponsored the legislation, saying restaurants often operate on very small profit margins. 

“It's one of those things where if If you have a disparity in a forced raise of costs for the businesses, they will either shut down, limit staff or make other alternatives," Wilmeth said. 

Democratic state Rep. Analise Ortiz says the measure disproportionately hurts the working class.

“SCR 1040 will continue to ensure that the rich get richer and working class people will be taken advantage of by the 1%. This is not policy in the best interest of workers," Ortiz said. 

The resolution comes as a ballot initiative aims to require restaurants to pay all staff minimum wage, regardless of tips. Supporters are still gathering signatures. 

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Greg Hahne started as a news intern at KJZZ in 2020 and returned as a field correspondent in 2021. He learned his love for radio by joining Arizona State University's Blaze Radio, where he worked on the production team.