Minimum Wage Changes Will Be on the Ballot in Multiple States
Author: Michael Cardman, Brightmine Senior Legal Editor
October 16, 2024
On Election Day, November 5, voters will decide the fate of minimum wage initiatives in Alaska, Arizona, California, Massachusetts, Missouri and Everett, Washington.
Minimum wage increases have proven quite popular with voters in recent years. Of the 28 measures that have appeared on the ballot since 1996, all but two have been approved.
Alaska
In Alaska, Ballot Measure 1 would increase the state minimum wage to:
- $13.00 per hour, effective July 1, 2025;
- $14.00 per hour, effective July 1, 2026; and
- $15.00 per hour, effective July 1, 2027.
After that, the minimum wage would be adjusted for inflation every year.
Ballot Measure 1 also would require employers to provide employees with paid sick leave - 40 hours for small employers with 15 or fewer employees and 56 hours for large employers with 15 or more employees.
Arizona
In Arizona, Proposition 138 (as added by Senate Concurrent Resolution 1040) would allow employers to pay employees up to 25% less than the minimum hourly wage if the employer can establish that the employee's wage plus tips or gratuities is at least $2.00 more than the minimum wage for every hour worked. To determine employees' eligibility for this lower minimum wage, tips or gratuities would be averaged over the employer's payroll period or any other period selected by the employer that complies with state laws.
Currently, employers in Arizona may claim a tip credit of no more than $3.00 per hour. As a result, the minimum direct cash wage for tipped employees is currently $11.35 per hour (the 2024 minimum wage of $14.35 minus $3.00). Effective January 1, 2025, the minimum direct cash wage for tipped employees will increase to $11.70 per hour (the 2025 minimum wage of $14.70 minus $3.00).
If Proposition 138 is enacted, the minimum direct cash wage in 2025 would be $11.03 per hour for tipped employees whose weekly wages plus tips or gratuities are at least $16.70 per hour worked.
California
In California, Proposition 32 (also known as the Living Wage Act of 2022) would increase the state minimum wage to:
- $17.00 per hour for large employers with 26 or more employees and $16.00 per hour for small employers with 25 or fewer employees, projected effective December 18, 2024 (or five days after the Secretary of State certifies the election results);
- $18.00 per hour for large employers with 26 or more employees and $17.00 per hour for small employers with 25 or fewer employees, effective January 1, 2025; and
- $18.00 per hour for small employers with 25 or fewer employees, effective January 1, 2026 (the minimum wage would remain $18.00 for large employers).
Starting January 1, 2027, and every January 1 thereafter, the minimum wage would be adjusted for inflation.
If enacted, Proposition 32 would have downstream effects on other pay requirements, as well. Among other things, it would:
- Raise the minimum salaries for overtime-exempt executive, administrative and professional employees and inside salespersons;
- Render moot the local minimum wage requirements in many cities and counties throughout California for large employers (and, to a lesser extent, small employers); and
- Raise the subminimum wage for learners and the maximum deduction for meals and lodging.
According to one recent poll, support for Proposition 32 is decreasing as Election Day approaches; however, it maintains a plurality of support.
Massachusetts
In Massachusetts, Question 5 would gradually phase out the state's minimum wage tip credit by raising the minimum direct cash wage for tipped employees from $6.75 per hour to:
- 64% of the minimum wage, effective January 1, 2025;
- 73% of the minimum wage, effective January 1, 2026;
- 82% of the minimum wage, effective January 1, 2027;
- 91% of the minimum wage, effective January 1, 2028; and
- 100% of the minimum wage, effective January 1, 2029 (effectively eliminating the tip credit).
Effective January 1, 2025, Question 5 also would allow employers to administer tip pools that combine all the tips given by customers to tipped workers and distribute them among all workers, including non-tipped workers. Currently, only service employees, service bartenders and wait staff employees are allowed to participate in tip pools.
Missouri
In Missouri, Proposition A would raise the minimum wage from $12.30 to:
- 13.75 per hour, effective January 1, 2025; and
- 15.00 per hour, effective January 1, 2026.
Annual inflation adjustments would resume, effective January 1, 2027.
Proposition A also would require employers to provide one hour of paid sick leave accrual for every 30 hours worked. Small employers with 15 or fewer employees would be required to provide at least five paid sick days per year, and large employers 16 or more employees would be required to provide at least seven paid sick days per year.
Everett, Washington
In the Seattle suburb of Everett, Washington, Initiative 24-02 would:
- Establish a local minimum wage of $20.24 per hour for large employers, effective July 1, 2025;
- Phase in the minimum wage for smaller employers over the next two years; and
- Adjust the minimum wage for inflation every year.
If enacted, Everett's local minimum wage would be among the highest in the nation.
Everett would join several other localities in Washington - Bellingham, Burien, King County, Renton, SeaTac, Seattle and Tukwila - that also have passed local minimum wage ordinances.