What Does Prop. 138 Do?
Prop. 138 protects the current tipping system in full service restaurants and other traditional full service industries. It does this by changing the stagnant and outdated $3 tip credit to a percentage pegged to the minimum wage and giving it constitutional protections. It also increases the guaranteed base wage for servers by $2 per hour.
If Prop. 138 were in place today, the guaranteed base wage for servers would be $16.35 per hour instead of $14.35 per hour.
Why Should I Care About the Tip Credit?
For us, Tipped Workers, Prop. 138 is essential for protecting our livelihoods. Prop. 138 gives critical constitutional protection to our tips and the tipping model by protecting the tip credit and increasing the guaranteed wage for workers. The tip credit is crucial for Arizona's tipped workers, restaurants, and customers. This system blends the stability of an guaranteed base wage with the potential for significant earnings through tips for employees. This structure rewards exceptional service while saving customers from paying sales tax on the service they receive at restaurants and preventing mandatory service charges.
In fact, 90% of tipped workers support the current model, and 87% fear that their earning would drop if the tip credit was eliminated.
Moreover, this system supports the financial health of restaurants, allowing them to allocate resources wisely, sustain employment opportunities, and continue innovating in the culinary world. By voting for Prop. 138, you are supporting the current system that recognizes and rewards hard work, skill, and dedication to service excellence, ensuring that the restaurant industry remains vibrant, diverse, and driven by passion.
What are Other Tipped Workers Saying?
How Prop. 138 Impacts You as A Tipped Worker
Tipped workers rely on the current tipping system. Under this system, any tips left are the legal property of the workers. Businesses are prohibited from retaining or using the tips in any way. This allows tipped workers to earn significantly more than minimum wage. In fact, the average tipped worker earns upwards of $27 per hour and many earn closer to $40 per hour. Unfortunately, there are outside groups trying to blowup this system. That is why Prop. 138 is so important. Prop. 138 protects the current compensation model tipped workers rely on by ensuring workers' tips receive constitutional protections while increasing the guaranteed pay for servers by $2 per hour.
Without Prop. 138, the tip credit could be eliminated, leaving the future of tip protections in peril. In areas of the country that have eliminated the tip credit, tipped workers have seen their tips decrease, or disappear altogether and be replaced by mandatory service charges. Unlike tips, these service charges are the legal property of the business.
What You Need to Know
If Prop. 138 fails and the tip credit is removed, the vibrancy of Arizona’s unique dining scene will be threatened.
Without Prop. 138, servers will lose a significant portion of their income, and menu prices will increase.
Without the tip credit, your neighborhood restaurant and bar would struggle to make it in such an environment.