Wage & Hour Laws -- Employee
Arizona Wage Laws
The Industrial Commission of Arizona is responsible for administering and enforcing Arizona’s employment laws. Those laws relate to workers’ compensation, wages paid, child labor, and laws regarding the welfare and safety of employees across the state.
Pay Periods Are Imposed in Arizona Labor Laws
In Arizona, employees must be paid at least twice a month. An employer is required to designate at least two days per month as fixed paydays. Those days cannot be more than 16 days apart. If the scheduled payday is a holiday or weekend, the employer must pay their employees “before” the holiday or weekend. They must ensure the pay periods are not more than 16 days in between.
Employers whose principal business resides outside the state of Arizona, as well as their centralized payroll processing, may be excluded from the 16-day limitation and may implement a once-a-month pay period. However, this exclusion is only for employee positions that are of an executive, professional, administrative, or outside salesperson capacity per the definition under the Fair Labor Standards Act. The exclusion is also inclusive of supervisory positions per the definition under the National Labor Relations Act.
The Minimum Wage for Arizonian Workers’ Act was first implemented in 2007. The state’s minimum wage was increased on the first day of January each year thereafter in accordance with the cost of living increase. In January 2014, the minimum wage was $7.90 per hour. Effective Jan. 1, 2015, the Arizona minimum wage increased to $8.05.
Minimum Wage Law Exclusions
Employers that are excluded from the Minimum Wage Act are:
- State of Arizona government agencies
- United States federal departments
- Businesses whose annual gross revenue is under $500,000 — and that are not subject to the Federal Fair Labor Standards Act
Only a small number of businesses exist that are not under the FLSA, either by enterprise or individual employee coverage. If an “enterprise” is involved in producing goods for any type of commerce covered under the FLSA, or any type of interstate commerce, the enterprise is subject to the FLSA regulations. Employees participating in these types of activities would be covered under FLSA, making the enterprise subject to the FLSA regulations.
Employees That Are Excluded From the Minimum Wage Act Are:
- State or government employees
- Employees who work for a sibling or parent
- Babysitters working in a home on a casual basis only
- Employees of small businesses that gross less than $500,000 a year, and both the enterprise and employee are not covered under the FLSA
The Minimum Wage Act applies whether an employee is part-time, full-time, or working on a temporary basis. Employers must pay their employees at least the minimum wage per hour.
Minimum Wage for Tipped Employees
Waitresses, waiters, bartenders, busboys, bellhops, hairdressers and valets usually receive tips from customers; therefore, employers can pay them less than the required minimum wage. In Arizona, employers must ensure their tipped employees are being paid up to the minimum wage amount, which can include tips up to $3.00 as a portion of that wage. For instance, with the current minimum wage of $8.05, an employer could pay his tipped employee $3.00 less, making their paid wage $5.05. This is not considered an exclusion to the Minimum Wage Act because the employee is expected to make the $3.00 per hour via tips received.
Unlike many other states, Arizona does not have an overtime law. However, federal overtime laws will still apply for any employees that are covered by the FLSA. According to the FLSA, employers must pay at least one and a half times the employee’s hourly wage for any time worked that exceeds 40 hours in one week.