The Arkansas Minimum Wage Increase Initiative Is On Its Way – This fall, Arkansas voters will have the choice to increase the state minimum wage to $11.00 per hour by 2021. The Arkansas Secretary of State announced on August 16 that petitioners had raised more than 84,000 valid signatures in support of adding the measure to the November 6, 2018 ballot – over 15,000 more than were needed to qualify.
Given the enthusiasm on display for this petition, employers should pay familiarize themselves with the minimum wage requirements covered by this proposal. If the measure is approved, employers will be required to raise wages just a few months after the vote.
ARKANSAS MINIMUM WAGE INCREASE INITIATIVE: REPEATING HISTORY?
This isn’t the first time that Arkansas voters have decided that the legislature wasn’t moving fast enough to increase wages for the state’s most vulnerable workers. In 2014, voters passed An Act to Increase the Arkansas Minimum Wage, which set a series of scheduled increases to move the state’s minimum wage above the federal level of $7.25:
- January 1, 2015: minimum wage increases to $7.50
- January 1, 2016: minimum wage increases to $8.00
- January 1, 2017: minimum wage increases to $8.50
The Arkansas minimum wage law does allow a slightly lower rate (85% of the minimum wage) to be paid to full-time students who work 20 hours per week when school is in session. The law also allows employers of employees who regularly receive tips, such as workers in the restaurant and hospitality industries, to use a gratuity allowance or tip credit. The current allowable tip credit is $5.87 per hour.
The new ballot measure, the Arkansas Minimum Wage Increase Initiative, also sets an annual schedule with incremental increases, although the year-to-year increase is slightly larger than those set by the 2014 initiative:
- January 1, 2019: minimum wage increases to $9.25
- January 1, 2020: minimum wage increases to $10.00
- January 1, 2021: minimum wage increases to 11.00
The proposed measure does not explicitly amend the student wage or gratuity allowance, although the student wage would still increase with the measure as it is a percentage of the general minimum wage rate. The gratuity allowance would increase in reaction to the measure, as it is designed to make up the difference between the static tipped minimum wage – set at the federal level of $2.13 – and the general state minimum wage rate.
The Arkansas Minimum Wage Increase Initiative will be on the November 6, 2018 ballot as Issue Five. CPC will be monitoring the results of the election to ensure that the minimum wage notice on the Arkansas All-On-One Poster remains in compliance with posting requirements.
ARKANSAS MINIMUM WAGE: IN CONTEXT
The current Arkansas minimum wage of $8.50 is higher than the federal minimum wage and, as a result, the minimum wage rates of surrounding states. The bordering states of Kansas, Oklahoma, Texas, Louisiana, Mississippi, Tennessee, and Kentucky each use the federal minimum wage rate of $7.25.
Neighbor state Missouri has a minimum wage set slightly higher than the federal at $7.85, but at the moment it is still $0.65 per hour less than the current Arkansas minimum wage rate. However, that may change – Missouri voters will also get a chance to increase the minimum wage on the November ballot. The Missouri proposal aims to eventually raise the minimum wage even higher than the proposed Arkansas rate by moving to $12.00 per hour by 2023.
Although the minimum wage is relatively high for the region, advocates argue that the Arkansas Minimum Wage Increase Initiative is still necessary in order to keep up with inflation and help low-wage workers support themselves. In a recently-released statement, Kristin Foster of River Valley Food 4 Kids, a non-profit organization dedicated to child hunger relief, said, “In my field, I see parents who are working full time, sometimes two jobs, who still need food stamps to feed their family. That’s just wrong… We need to raise the minimum wage so families can feed their children without taxpayer dollars.” Foster is also the campaign manager for Arkansans for a Fair Wage.
The Arkansas State Chamber of Commerce has not yet released a statement, but earlier this year Chamber President Randy Zook formed a ballot question committee with the purpose to “advocate for disqualification and defeat” of the initiative.
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