Guest ContributorAdvocates for workers who rely on tips for much of their earnings urged members of the state House Commerce Committee on Tuesday to act to preserve the workers’ livelihoods.
If passed by the Legislature, SCR 1040, The Tipped Workers Protection Act, would ask voters in November to decide whether the state constitution should be changed to protect tipped earnings and increase the guaranteed base wage for servers.
Advocates for tipped workers say the change is necessary as activists nationwide pursue policies that would eliminate the so-called “tip credit,” which allows employers to pay their tipped workers less than the mandated hourly wage since workers who earn tips often take home far more than they would if they were regular hourly workers.
Under The Tipped Workers Protection Act, tipped workers would be guaranteed to earn at least $2 more than the minimum wage.
In Arizona, the state minimum wage is $14.35 per hour and is adjusted upward every January depending on the rate of inflation.
Anti-tipping advocates backed by organized labor, however, are gathering signatures to put their own proposal on the Arizona ballot in November to eliminate the tip credit.
But as lawmakers heard Tuesday, the consequences could be severe, driving up labor costs for employers in sectors like dining and hospitality, which in turn could lead to lower earnings for previously tipped workers due to reduced hours and shifts.
Small, independent restaurants in rural parts of the state, which already operate on extremely thin margins, would likely struggle the most.
Patrons would likely see an impact, too, with higher menu prices, as well as fewer staff members and diminished service levels as restaurateurs pivot to less labor-intensive technology like app-based ordering to offset the higher labor costs.
Tip credits have been eliminated in other states and the District of Columbia, where a National Restaurant Association survey of 1,000 D.C.-area adults found that more than half are dining out less because of higher prices and, when they do, are more reluctant to leave an additional tip for their server due to higher prices or mandatory service charges.
“It’s unfortunate that this bill is necessary, but anti-tipping advocates are doing all they can to undermine a pay model for servers that for decades has proven successful,” Arizona Chamber of Commerce & Industry Vice President of Government Affairs Courtney Coolidge said. “By making it more expensive to hire servers, the anti-tipping crowd is hurting the very people they claim to want to help.”
In addition to the state chamber of commerce and local chambers, many organizations representing servers support the bill, including the Arizona Restaurant Association and the Arizona Lodging and Tourism Association.
Sultan Stipho, a server who testified before the committee, said earning tips is his profession’s “upside,” allowing servers to make a significant amount of money in a relatively short period of time.
Stipho said he entered the field because of its flexibility and its potentially unlimited earning potential, comparing tips to commissions in sales.
“I urge you all to think about the people here who are actually working in the industry,” he said.
The bill passed the Commerce Committee by a 6-3 vote. If approved by the full House, the measure would head to the state Senate for a final vote. If passed there, it would head to the November ballot.
Joseph Kavetsky
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