Arizona Labor Laws

Updated: 03/17/2020

Arizona Minimum Wage

As of January 1, 2020, Arizona's minimum wage rate is $12 per hour. Starting January 2021, the rate will be tied to the Consumer Price Index (CPI) and future increases will be based on changes in the CPI.

USA map with Arizona superimposed

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History of Arizona Labor Laws

In 1910 (a few years before it became a state), Arizona mirrored or codified a lot of federal labor law as part of its constitution.

Arizona follows the lead of the National Labor Relations Act in protecting unions. In 1925, the Industrial Committee of Arizona was created to help establish a workers’ compensation program.

Arizona is a right-to-work state and gives employees the right to choose whether they will join a union.

Further, Arizona allows (based on the Arizona’s Employment Protection Act of 1996) for at-will employment unless otherwise stated in contracts between the employee and employer or a collective bargaining agreement.

In 2016, Arizona voters overwhelmingly passed Proposition 206 (the Fair Wages and Healthy Families Act), which set new minimum wage rates and codified earned paid sick leave time. The act is notable in that the accrued sick leave calculations do not exempt any professions or salary ranges.

Municipality Minimum Wage Laws

Flagstaff, Arizona, passed a local minimum wage rate in 2016. As of January 1, 2020, the rate is $13 per hour, with a direct pay (substandard rate) tipped employee rate of $10 per hour (before tip credit).

The city minimum wage rate is scheduled for a minimum wage increase to $15 per hour in January 2021 and $15.50 per hour in January 2022. Beginning in 2023, the minimum wage rate for Flagstaff will be adjusted each January using indexing tied to the Consumer Price Index for all Urban Consumers.

Arizona Minimum Wage Law Exemptions

Arizona has several state exemptions to minimum wage law in addition to federal exemptions. As with any state laws, federal law supersedes the state law when the state law is less favorable to employees.

Businesses with gross revenues of less than $500,000 are exempt from Arizona minimum wage rules. However, businesses may still be subject to federal minimum wage rules under federal laws such as the Fair Labor Standards Act.

Workers employed by the state of Arizona or the federal government are also exempt from being required to receive state minimum wage rates.

Arizona does not allow those with mental, development or physical disabilities to be paid less than the standard state minimum wage unless they are not considered employees under the state minimum wage law. This situation might occur if they are in a qualified vocational training program.

Family employees, those employed by their parent or sibling, are also exempted from state minimum wage rules. Casual babysitting in the home of the child is also exempted.

Arizona Posting Requirements

Arizona has several employee rights and duties posting requirements, in addition to applicable federal poster requirements. These include not only minimum wage and the state-mandated paid sick leave accrual information but also notices regarding work exposure to bodily fluids, MRSA, spinal meningitis and TB.

Required Posters:

  • Minimum Wage
  • Paid Sick Time
  • Fair Employment
  • Work Exposure to Bodily Fluids
  • Work Exposure to MRSA, spinal meningitis or TB
  • Constructive Discharge
  • Unemployment Insurance
  • Safety and Health Protection on the Job
  • Workers’ Compensation
  • No Smoking Poster

Tipped Wage in Arizona

Arizona allows employers to take tip credits for tipped employees and allows employers to use tip pools under the rules set by the federal Fair Labor Standards Act.

For the state, the direct wage (subminimum wage) is $9 per hour (as of January 1, 2020) before tips. As of January 2021, when the full minimum wage becomes indexed, the tipped wage will be set at $3 per hour less than the standard state minimum wage rate.

Flagstaff has a more aggressive stance on tipped employee wages than the state. The local direct wage (subminimum wage) before tips is $10 per hour (as of January 1, 2020). Increases are scheduled as the state minimum wage rises through 2022.

Once the Flagstaff minimum wage becomes indexed to the Consumer Price Index for all Urban Consumers in 2023, the tipped wage will continue to be modified until it is phased out as of January 1, 2026. At that point, tipped employees will fall under the same minimum wage as other types of employees.

For both state and Flagstaff rates, if tips plus the subminimum tipped minimum wage are less than the full applicable minimum wage rate when combined, the employer must make up the difference.

Overtime Wage in Arizona

Arizona does not have a separate state overtime pay law. Subject to the Fair Labor Standards Act, Arizona employers follow FLSA rules on overtime.

This means that federal exemptions with regard to who is eligible for overtime pay apply. A 2019 rule change increased the minimum salary required for exemption from overtime pay for some workers.

The FLSA requires that all covered employees be paid 1.5 times their regular rate of pay for hours worked over 40 in a workweek.

Child Labor Laws in Arizona

Arizona has several limitations and requirements relating to the employment of minors. Similar to FLSA rules, Arizona has different employment requirements based on the age of the minor. As with all child labor laws, if both state and federal rules apply, the one that is more favorable to employees must be followed.

Exemptions to Arizona minor labor laws include:

  • Minors employed by parents or relatives provided the relative owns at least 10% of the business and is also actively engaged in the business operations on a daily basis.
  • Children in specific entertainment industries, such as movies, radio and stage plays, as long as the state Department Labor Department is notified in advance.
  • Minors working in qualified vocational, technical and other career education programs.
  • Minors who are registered with the Bureau of Apprenticeship and Training and working as apprentices.
  • Some children working for 4-H or specific U. S. education and training vocational agriculture programs.
  • Minors who have already graduated from high school or who have acquired an equivalent certificate.
  • Legally married minors.

Arizona also allows younger minors at least age 10 to sell or deliver newspapers and other periodicals within applicable hours-of-work limits.

Arizona lists supplement the list of hazardous work forbidden to minors under the FLSA for those under age 15 and those ages 16 and 17. Additional federal rules may apply to those under the age of 14.

Arizona does not require minors to get work permits, but it does allow employers to protect themselves by requiring minors to provide proof of age.

Hours of the day that can be worked vary based on age and school session, as do total hours worked. These hourly restrictions are discussed further in the frequently asked questions below.

Employer Recordkeeping Requirements

In addition to any applicable federal recordkeeping requirements, Arizona requires employees to keep certain payroll information.

Payroll information must include at least the employee information (name, address, etc.), hours worked each day, wages paid and earned sick time. Wages paid records must include time sheets or earning cards and the wage rate tables.

Further, details of any deductions or additions to wages paid, and the backing documentation with any written contracts or other agreements used to calculate credits used toward the total minimum wage, must be kept.

Earned sick time records must be kept in accordance with the Arizona Fair Wages and Healthy Families Act, which establishes a requirement for earned sick leave.

Payroll records in Arizona must be kept for at least four years.

Recent Arizona Labor Law Updates

Minimum Wage - Mandatory - November 2018

The Arizona Minimum Wage poster was updated to reflect the minimum wage rate effective January 1, 2019 of $11.00 per hour.

Paid Sick Time - Mandatory - July 2017

Beginning July 1, 2017, employees began earning one hour of paid sick time for every 30 hours worked. Employers had to give employees a written notice of their rights to earned paid sick time by July 1, 2017.

Arizona Labor Law Frequently Asked Questions

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