As we gear up for the midterm elections, the restaurant industry and other small businesses are facing critical ballot initiatives, including paid leave, minimum-wage increases and elimination of the tip credit, in three key states. Here’s what’s happening:

Arkansas

A fight to increase the minimum wage cropped up this spring and it continues to gather steam. The measure, originally rejected by the state’s attorney general, went forward after the State Supreme Court ruled she had to certify it. If passed, the referendum would:

  • Raise the state’s minimum wage to $9.25 an hour starting Jan. 1, 2019
  • Go up again, to $10 a year later
  • Increase to $11 by 2021

Proponents submitted signatures on July 6, and may have enough support to get the proposal on the Nov. 6 ballot.

Michigan

Two separate initiatives – one focused on paid sick leave and the other on increasing the state’s minimum wage – could wreak havoc on business owners here. The paid sick leave bill would require businesses with more than 10 employees to provide 72 hours of paid leave annually. Companies with less than 10 employees would have to give workers 40 hours of paid leave per year. The second measure, called “One Fair Wage,” seeks the following:

  • An increase of the state’s minimum wage to $12 an hour by 2022
  • Elimination of the tip credit by 2024
  • Time-and-a-half pay for employees who work more than 40 hours a week, and
  • A youth wage that is 80 percent of the minimum wage

A group called Michigan Opportunity, led by the Michigan Restaurant Association, recently filed a lawsuit against the measure citing its unconstitutionality. The lawsuit states the regulation doesn’t properly reference existing law. Furthermore, the state Board of Canvassers failed July 29 to certify the minimum-wage measure, but it approved the paid leave proposal. However, supporters of the minimum-wage issue are expected to challenge the decision.

Missouri

In May, petitioners filed more than 120,000 signatures to move a minimum-wage initiative forward. If passed, it would:

  • Raise the minimum wage from the current $7.85 to $12 an hour by 2023
  • Maintain the current tip credit of 50 percent of the minimum wage
  • Adjust the future minimum-wage depending on changes to the Consumer Price Index
  • Penalize employers who pay employees below the minimum wage and require them to pay the underpaid employee the full amount of the wage rate plus an additional amount equal to twice the unpaid wages

Learn more about industry issues and the Association’s advocacy work.