Voters to Decide on Higher Wages for Lowest-Paid Workers (1)

California would establish the nation’s highest statewide minimum wage if voters approve a ballot initiative raising it to $18, as one of a half dozen states sending wage and paid sick time proposals to voters next month.

Supporters of ballot proposals to raise the statewide wage floors in Alaska (Measure 1), California (Prop. 32), and Missouri (Prop. A) have reason for optimism. US voters haven’t rejected a statewide minimum wage ballot proposal in more than 20 years, even in Republican-leaning states such as Florida and Nebraska, where voters in 2020 and 2022 approved plans to phase in $15 minimum wages.

But this year’s ballot initiatives ask voters to go beyond many predecessors. The California proposal calls for the highest minimum wage ever set via statewide ballot measure, and the Alaska and Missouri proposals pair wage increases with mandating paid sick time for most workers.

The Alaska initiative additionally would ban “captive audience” requirements—mandatory workplace meetings on politics, religion, or labor unions. Alaska would join nine states that have broadly banned the meetings, though business groups have sued to challenge three of those state laws.

California’s hourly minimum wage is $16, slightly less than Washington state’s $16.28 and Washington, D.C.'s $17.50. New York state’s minimum will increase to $17 downstate and $16 elsewhere by 2026 and Hawaii passed a plan to raise its minimum wage to $18 by 2028.

More than a dozen California cities and counties already have higher local wage mandates. A new state law set a $20 minimum for fast food businesses and $18, $21, or $23 for various types of health-care employers.

The Alaska and Missouri proposals would raise those states’ minimum wages gradually to $15 hourly by 2027 and 2026, respectively.

Voters generally say yes to minimum wage boosts, said labor law professor Ruben Garcia of the University of Nevada, Las Vegas. “What is new about some of these is that they also are trying to legislate on things like paid leave,” he said.

Sick Leave

Similar to Alaska and Missouri, Nebraska would mandate paid sick time if voters approve its standalone ballot measure (Initiative 436). Smaller employers could provide fewer days off annually, for Nebraska employers with fewer than 20 employees and for Alaska or Missouri employers with fewer than 15.

Currently 15 states require paid sick time for private-sector workers and three others demand paid time off that employees can use for any reason.

Four in five US private-sector workers have access to paid sick time, according to the US Bureau of Labor Statistics. But access varies widely, said Jared Make, vice president at A Better Balance.

“When you break that data down further, there are still significant disparities,” he said.

Among the top quarter of US workers by income, 94% have paid sick time. For the bottom quarter, it’s 58%.

The Missouri proposal would let workers sue for retaliation if they feel their employer has violated their right to paid time off—one reason that some business groups oppose it.

“We believe employers should be free to set their own sick leave and associated requirements for using that leave,” Associated Industries of Missouri said on its website, “and we oppose any measure that creates new ways to sue employers.”

Tipped Workers

Restaurant and hotel industries in Massachusetts are campaigning against a proposal (Question 5) to phase out the state’s tipped minimum wage law, which lets employers pay workers less than the standard minimum wage if they make up the difference via tips. Employers would have to pay tipped workers 64% of the minimum wage starting in 2025, gradually increasing to 100% in 2029.

Full minimum wage currently is $15 per hour in Massachusetts.

Ending the tip credit would upend restaurants’ business model, leading to service fees and potentially job cuts, said Jessica Muradian, government affairs director for the Massachusetts Restaurant Association.

Servers would see their total pay decrease as customers tip less, she predicted, pointing to data that shows restaurant diners average the nation’s lowest tip percentage in California, where there is no tip credit. “We’ve heard from servers and bartenders overwhelmingly the current system works,” Muradian said.

TV and digital ads amplify that argument. “If you want to help your wait staff, vote no. Protect their tips while opposing higher prices and new service fees,” one ad says.

Final screen image in a commercial aired by opponents of the Massachusetts tipped minimum wage ballot question.

Source: AdImpact

The effort follows the lead of similar proposals, including in Washington, D.C., where voters in 2022 approved a ballot measure to end the tip credit by 2027.

The restaurant industry has contributed roughly $1 million to the Massachusetts fight, including $250,000 from Darden Corp., the owner of restaurant brands like Olive Garden.

The group One Fair Wage has contributed nearly $1 million of in-kind services to support the Massachusetts proposal, according to state campaign finance disclosures. It argues that employees who rely heavily on tips are vulnerable to sexual harassment and other mistreatment at work and are at risk of exiting the industry.

“Our research reveals that 53 percent of restaurant workers surveyed are considering leaving the industry, 70 percent of whom are citing low wages and tips as their primary reason,” its website said.

Alaska, Minnesota, Montana, Nevada, Oregon, and Washington state already require employers to pay the full statewide minimum wage to tipped workers.

Arizona (Prop. 138) could go the opposite direction—enshrining the state’s tip credit in its constitution and expanding it to let employers pay tipped workers a smaller portion of the state’s minimum wage as that rate increases annually with inflation.

Arizona now lets employers pay tipped workers $3 less than the standard minimum wage of $14.35, expected to rise to $14.70 per hour in 2025 based on inflation. If voters approve the ballot question employers could pay tipped workers 25% less than minimum wage—or $11.03 per hour in 2025—if they can show the workers’ wages plus tips add up to at least $2 above the state minimum wage.,