Arizona and Massachusetts reject tip credit measures

Published: November 6, 2024 | by Michael Cardman, Senior Legal Editor at Brightmine

Voters have defeated ballot initiatives that would have changed the minimum wage tip credit in Arizona and Massachusetts.

Arizona Proposition 138 — which would have allowed employers to pay employees up to 25% less than the minimum hourly wage if the employer could establish that the employee’s wage plus tips or gratuities is at least $2.00 more than the minimum wage for every hour worked — was roundly rejected by a 25-75 margin, according to unofficial results.

Massachusetts Question 5 — which would have gradually phased out the state’s minimum wage credit by 2029 and also have allowed employers to administer tip pools that distribute tips among all workers — was losing by a 36-64 margin at the time of publication, according to the New York Times (Massachusetts does not publish unofficial results).

In the Seattle suburb of Everett, Washington, Initiative 24-02 – which would have established a local minimum wage of $20.24 per hour for large employers starting in July 1, 2025, and then phased in the minimum wage for smaller employers over the next two years — was defeated by a 41-59 margin, according to unofficial results.

At the time of publication, the race was still too close to call for minimum wage ballot initiatives in Alaska and California. With 76% of votes in, Alaska’s measure had a commanding-but-not-insurmountable lead of 57-43. With 52% of votes in, California’s measure was losing 48-52.

The results suggest that voters may be losing their appetite for minimum wage increases. Before the November 5 election, all but two of the 28 minimum wage increases that have appeared on the ballot since 1996 had been approved.