Arizona does not have its own overtime statute, so the federal Fair Labor Standards Act (FLSA) rules apply. The FLSA allows employers to require overtime work as long as nonexempt employees are paid overtime rates. Employee contracts and collective bargaining agreements that are more favorable to the employee may modify these requirements.
Arizona Labor Laws
Arizona Minimum Wage
As of January 1, 2021, Arizona’s minimum wage is $12.15 per hour. This rate is now linked to the Consumer Price Index (CPI), meaning future increases will be based on changes in the CPI.
Arizona Labor Law Posters
Simplify labor law compliance and make workplace policies visible with J. J. Keller state and federal labor law posters.
History of Arizona Labor Laws
In 1910, a few years before achieving statehood, Arizona incorporated many federal labor laws into its constitution.
Arizona aligns with the National Labor Relations Act in protecting unions. In 1925, the Industrial Committee of Arizona was established to create a workers’ compensation program.
As a right-to-work state, Arizona allows employees to decide whether to join a union.
Additionally, the Arizona Employment Protection Act of 1996 permits at-will employment unless otherwise specified in contracts or collective bargaining agreements.
In 2016, Arizona voters passed Proposition 206 (the Fair Wages and Healthy Families Act), which set new minimum wage rates and established earned paid sick leave. Notably, the act’s sick leave calculations do not exempt any professions or salary ranges.
Municipality Minimum Wage Laws
Flagstaff, Arizona, established a local minimum wage rate in 2016. As of January 1, 2020, the rate is $13 per hour, with a tipped employee rate of $10 per hour (before tip credit).
The city’s minimum wage was scheduled to increase to $15 per hour in January 2021 and $15.50 per hour in January 2022. Starting in 2023, Flagstaff’s minimum wage rate will be adjusted annually in January based on the Consumer Price Index for all Urban Consumers.
Arizona Minimum Wage Exemptions
Arizona has several state-specific exemptions to its minimum wage law, in addition to federal exemptions. As with any state laws, federal law takes precedence when it is more favorable to employees.
Businesses with gross revenues under $500,000 are exempt from Arizona’s minimum wage rules, though they may still be subject to federal minimum wage laws such as the Fair Labor Standards Act.
Employees of the state of Arizona or the federal government are also exempt from state minimum wage requirements.
Arizona does not permit paying individuals with mental, developmental, or physical disabilities less than the standard state minimum wage unless they are not considered employees under state law, such as those in a qualified vocational training program.
Family employees, such as those employed by a parent or sibling, are exempt from state minimum wage rules. Casual babysitting in the child’s home is also exempt.
Arizona Posting Requirements
Arizona has several employee rights and duties posting requirements, in addition to federal poster requirements. These include information on minimum wage, state-mandated paid sick leave accrual, and notices about 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 permits employers to take tip credits for tipped employees and to use tip pools under the federal Fair Labor Standards Act rules.
State Rates:
- As of January 1, 2020, the direct wage (subminimum wage) is $9 per hour before tips.
- Starting January 2021, the tipped wage is set at $3 per hour less than the standard state minimum wage rate, which is indexed to the Consumer Price Index (CPI).
Flagstaff Rates:
- As of January 1, 2020, the local direct wage (subminimum wage) before tips is $10 per hour.
- Scheduled increases align with the state minimum wage through 2022.
- Beginning in 2023, the Flagstaff minimum wage is indexed to the CPI, and the tipped wage will be gradually phased out by January 1, 2026. At that point, tipped employees will receive the same minimum wage as other employees.
For both state and Flagstaff rates, if the combined tips and subminimum tipped wage are less than the full applicable minimum wage, the employer must make up the difference.
Overtime Wage in Arizona
Arizona does not have a separate state overtime pay law, so employers in the state follow the Fair Labor Standards Act (FLSA) rules on overtime.
This means that federal exemptions regarding eligibility for overtime pay apply. A 2019 rule change increased the minimum salary required for some workers to be exempt from overtime pay.
Under the FLSA, all covered employees must 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 regarding the employment of minors, similar to the Fair Labor Standards Act (FLSA). The state has different employment rules based on the minor’s age, and when both state and federal laws apply, the more favorable rule for employees must be followed.
Exemptions to Arizona Minor Labor Laws:
- Minors employed by parents or relatives, provided the relative owns at least 10% of the business and is actively engaged in daily operations.
- Children in specific entertainment industries, such as movies, radio, and stage plays, with prior notification to the state Department of Labor.
- Minors in qualified vocational, technical, and other career education programs.
- Minors registered with the Bureau of Apprenticeship and Training and working as apprentices.
- Children working for 4-H or specific U.S. education and training vocational agriculture programs.
- Minors who have graduated from high school or obtained an equivalent certificate.
- Legally married minors.
Additionally, Arizona allows minors aged 10 and older to sell or deliver newspapers and other periodicals within applicable work hour limits.
Arizona supplements the FLSA list of hazardous work forbidden to minors under 15 and those aged 16 and 17. Additional federal rules may apply to those under 14.
Arizona does not require work permits for minors but allows employers to request proof of age for protection.
Work hours vary based on the minor’s age and whether school is in session. These hourly restrictions are detailed further in the frequently asked questions below.
Employer Recordkeeping Requirements in Arizona
In addition to federal recordkeeping requirements, Arizona mandates that employers maintain specific payroll information.
Required Payroll Information:
- Employee details (name, address, etc.)
- Hours worked each day
- Wages paid
- Earned sick time
- Time sheets or earning cards
- Wage rate tables
Employers must also keep records of any deductions or additions to wages paid, along with supporting documentation, including written contracts or agreements used to calculate credits toward the total minimum wage.
Earned sick time records must comply with the Arizona Fair Wages and Healthy Families Act, which requires earned sick leave.
Payroll records in Arizona must be retained for at least four years.
Arizona Labor Law Questions & Answers
Minors under 16 in Arizona have specific limitations on work hours:
- School days: No more than 3 hours per day if enrolled in school.
- Non-school days: Up to 8 hours per day.
- School weeks: No more than 18 hours per week.
- Non-school weeks: Up to 8 hours per day and 40 hours per week.
When school is in session the next day, minors under 16 cannot work before 6 a.m. or after 9:30 p.m. If school is not in session the next day, they can work until 11 p.m. Regardless of school enrollment, they cannot work before 6 a.m. or after 11 p.m. on any day. Minors under 16 in door-to-door sales cannot work past 7 p.m.
The FLSA imposes additional limits, preventing those under 16 from working earlier than 7 a.m. or later than 7 p.m. during school sessions, with extended hours until 9 p.m. during summer months.
Arizona does not have a separate law requiring work breaks, so employers should refer to the FLSA. While the FLSA does not mandate breaks, if short breaks (usually under 20 minutes) are provided, they must be counted as paid time. Meal breaks, if offered, must be paid if the employee is not completely free of work duties and allowed to leave the premises.
Arizona follows the FLSA rules for tip pooling. Employees must be notified in advance of tip pooling arrangements, and tip pools cannot include employees who do not normally receive tips (e.g., dishwashers, cooks). Employers cannot require employees to contribute more to the tip pool than is usual and customary.
Yes, Proposition 206, The Fair Wages and Healthy Families Act, passed in 2016, guarantees the accrual of sick time for all Arizona employers, without exempting any professions or salary ranges.
Sick Leave Accrual:
- Employers with 15 or more employees: Must provide at least one hour of sick leave for every 30 hours worked, with a cap of 40 hours per year unless a higher limit is set by the employer.
- Employers with fewer than 15 employees: Must also provide one hour of sick leave for every 30 hours worked, but the cap is 24 hours per year unless a higher limit is set by the employer.
Year Calculation: Employers can define a “year” in various ways, such as using the date of hire, the calendar year, or the fiscal year.
Usage of Sick Leave: Employees can use accrued sick leave for:
- Medical care for physical or mental health issues
- Public health emergencies
- Absences related to domestic violence, abuse, sexual violence, or stalking
This leave can be used for the employee or their family members.
Arizona Labor Law Posters
Simplify labor law compliance and make workplace policies visible with J. J. Keller state and federal labor law posters.