How tipped workers get paid: Why some Flagstaff workers are voting no on Prop 138

FLAGSTAFF, AZ (AZFamily) — Proposition 138, an Arizona ballot measure determining how tipped workers are paid will be decided by voters next month. Currently, employers can pay tipped employees $3 below the minimum wage.

If passed, employees’ hourly pay can be 25% per hour less than the minimum wage as long as their take home, tips included, still comes out to at least $2 over minimum wage.

Arizona’s minimum wage will be $14.70 per hour in 2025, and in Flagstaff, it will be $17.85.

If Prop 138 passes, tipped employees would lose 65 cents an hour. In Flagstaff, however, the cut will be $3.45 an hour, causing concern for local workers.

“I don’t think we should move backward, I think we should move forward.” said local worker Fran Alvarado.

According to the Flagstaff Chamber of Commerce, the cost of living is 14% higher than the national average and more than 10% higher than Phoenix – hourly workers said they already struggle to afford rent and food.

“We in our generation have seen our wages go from dirt cheap to all the way to almost double that in the last ten years,” Alvarado said.

The Arizona Restaurant Association supports Proposition 138 because it would cut restaurant costs and ensure that tipped employees are adequately paid.

Flagstaff restaurant owner John Conley has also supported the proposition because of those reasons. He has said it would provide relief for Flagstaff restaurants that have struggled with exponential increases in hourly wages since 2016.

He shared that, due to increased labor costs, many businesses in the area have had to shut down, limit staff, and raise prices.

However, workers like Alvarado said this would force them to rely on unreliable tipping and place the burden on consumers, not restaurant owners.

“Why is it that we’re trying to repel the progress we made so far,” Alvarado said. “And why aren’t we fighting businesses and landlords and the things like that? We’re just normal people looking for money that belongs to us.”

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