In Glendale, Prop. 499 would boost minimum wage to $20 for hospitality workers

Voters in Glendale will decide whether certain hospitality employees should receive a minimum wage of $20 an hour with annual cost of living increases. Arizona’s current minimum wage is $14.35.

Proposition 499 is specifically aimed at people who work in hotels and event centers larger than 20,000 square feet, like the Glendale Civic Center, State Farm Stadium and Desert Diamond Arena.

Brendan Walsh, executive director of Worker Power, the group that gathered signatures to get the measure on the ballot, said along with a $20 minimum wage, Prop. 499 would require service charges go to service workers.

“A lot of times you'll see something on your bill for a banquet you do at a hotel or somewhere else where you'll pay a 20% service charge, but not all of that actually goes to the workers. It's not truly a service charge. The company keeps a significant portion of it,” Walsh said.

Prop. 499 would require Glendale to create a department of labor to investigate complaints and initiate enforcement.

“We've estimated that the annual cost to be roughly a million dollars,” said Kevin Phelps, Glendale city manager. “And while we'll certainly do what the will of the voters is, that would be a component that we wouldn't be overly excited about doing, which is the auditing of all of our businesses.”

Glendale, which cannot take a formal position on the measure, commissioned an independent economic impact analysis by Applied Economics LLC to determine the potential impact.

“So, they went and looked at the impact on room rates and then room rates having an impact on occupancy percentages in terms of the number of rooms being booked on a daily basis,” Phelps said. “And what they said is in year one, that the city would see roughly a $3 million decrease in revenue, all things being equal.”

Business groups that submitted arguments against Prop. 499 for the election publicity pamphlet said the measure will force companies to raise prices or cut employee hours and positions.

Walsh said when employees earn more money, they’ll spend more locally, and when it comes to staffing levels.

“What we're seeing in the industry is that employers are already trying to cut to the bone through automation, understaffing, etc., the number of people they employ. So that can't be a factor because they're already doing that," Walsh said.

Key provisions of Proposition 499

• $20 hourly minimum wage for hotel and event center workers with annual cost of living increases.
• Requires all service charges and tips to be paid to the employee associated with the room or service.
• Employers cannot offset wages by the amount of tips or service charges.
• Employees cannot work more than 10 hours per day without their written permission.
• Limits on how many square feet of rooms an employee can clean per shift before they are paid double time ($40 per hour) for their entire shift.
• Establishes a city department of labor to investigate complaints and initiate enforcement.