At Feast in Midtown, owner Doug Levy has been using the tip credit for years. Since he opened in 2001, he has seen the minimum wage go up from about two dollars to the current $14.35 per hour.
However, his tipped employees can legally get paid $11.35 an hour because of the tip credit.
One Fair Wage Action is trying to get rid of the tip credit and raise the minimum wage to $18 an hour.
Levy said that could cause the businesses he buys his food from to raise their pay, which in turn could raise prices on him.
So now were paying more for food and were paying more for our labor, so now we have to charge our guests more money, Levy said.
Separately, Senate Concurrent Resolution 1040 would change the tip credit to 25 percent instead of $3 under the minimum wage.
For example, with todays minimum wage of $14.35 per hour, tipped workers would make about about $10.76 an hour, and it would adjust whenever the minimum wage increases.
I think any business person is just going to have to change their pricing, Levy said.
Noah Dutcher works at a local restaurant and makes $11.35 an hour. He said he feels like tipped employees should not make minimum wage, and is comfortable with his pay.
But on the basis of the direction our economy is moving in, I do believe that minimum wage should continue to increase, Dutcher said.
As for the proposal to change the tip credit to 25 percent, he said it wouldnt impact him too much but could impact full time restaurant employees.
Even though it may not be a lot right off the start, it does add up, so eventually you should start cutting back, he said.
One Fair Wage AZs lawyer says they are on track to get enough signatures by July so their proposal can make it onto the ballot in November. SCR1040 passed in the House and is now being considered in the Senate.
Daniel Scordato, who owns Vivace in the Foothills, said theyve run smoothly with the tip credit. If the minimum wage increased to $18, he said he wouldnt mind paying un-tipped workers more, but it might affect customers.
If we keep digging, its just going to raise prices, he said.
He said a higher minimum wage could affect future raises for workers who dont get tipped because theyre paying waiters higher wages on top of tips. He said the tip credit should stay the same.
As long as with their tips they make a good amount of money, Scordato said.