SCR 1040
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ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
Second Regular Session
Senate: ED DP 4-3-1-0 | 3
rd
Read 16-12-2-0
House: COM DPA/SE 6-3-0-1
SCR1040: permanent school fund; distribution; uses
S/E: tipped workers; wages
Sponsor: Senator Mesnard, LD 13
Caucus & COW
Summary of the Strike-Everything Amendment to SCR 1040
Overview
Subject to voter approval, adds a new section to the State Constitution relating to wages of
tipped workers.
History
In 2016, voters approved The Fair Wages and Healthy Families Act (Proposition 206) which
established statutory law governing the requirements for a state minimum wage.
Pursuant to A.R.S. § 23-363, employers are required to pay employees a minimum wage. The
minimum wage is annually increased based on the cost of living which is measured by the
percentage increase as of August of the immediately preceding year over the level as of
August of the previous year of the consumer price index (all urban consumers, U.S. city
average for all items) as published by the U.S. Department of Labor, with the amount of the
minimum wage increase rounded to the nearest multiple of five cents.
Employers are permitted to pay an employee who customarily and regularly receives tips or
gratuities from patrons or others a wage up to $3 per hour less than the minimum wage if
the employer can establish by its records of charged tips or by the employee's declaration for
Federal Insurance Contributions Act purposes that for each week, when adding tips received
to wages paid, the employee received not less than the minimum wage for all hours worked.
Compliance must be determined by averaging tips received by the employee over the course
of the employer's payroll period or any other period selected by the employer that complies
with regulations adopted by the Industrial Commission of Arizona.
According to the Industrial Commission of Arizona, the current state minimum wage is
$14.35 per hour.
Provisions
1. Allows an employer, for any employee who customarily and regularly receives tips or
gratuities from patrons or others, to pay a wage up to 25% per hour less than the
statutorily set minimum wage if the employer can establish by the employer's records of
charged tips or gratuities or by the employee's declaration for Federal Insurance
Contributions Act purposes that for each week, when adding tips or gratuities received to
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note SCR 1040
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wages paid, the employee received not less than the minimum wage plus $2 for all hours
worked.
2. Asserts that compliance is determined by averaging tips or gratuities received by the
employee over the course of the employer's payroll period or any other period selected by
the employer that complies with laws enacted by the legislature.
3. Cites this act as the "Tipped Workers Protection Act."
4. Requires the Secretary of State to submit this proposition to the voters at the next general
election.