Arizona Labor Law Guide
Arizona has a diverse and growing business and investment climate. Arizona’s economy is characterized by a mix of industries, including technology, manufacturing, aerospace, healthcare, tourism, and agriculture. The state has sought to diversify its economy to reduce dependence on any single sector. Arizona is often considered a pro-business state with a business-friendly regulatory environment. The state government has implemented policies to attract businesses, including tax incentives and streamlined regulations.
Minimum Wage
$14.35
Overtime Wage
$1.5x Regular Wages
Meal Breaks
Not mandated
Rest Breaks
Paid if 20 minutes or less
The minimum wage in Arizona is $14.35 per hour as on January 1, 2023 for all workers, regardless of the size of the employer.
The minimum wage in Tucson will be $14.35 an hour in 2024. In Flagstaff, the minimum wage is $17.40 per hour.
The minimum wage in Arizona will continue to rise each year based on the increase in the cost of living index.
Arizona follows federal overtime rules outlined in the Fair Labor Standards Act (FLSA) for most private-sector employees.
Non-exempt employees in Arizona get overtime pay for the hours worked beyond 40 hours in a week. The overtime pay is calculated at 1.5 times the regular hourly pay.
Employers in Arizona may implement alternative workweek schedules, such as compressed workweeks, but they must ensure that employees receive the appropriate overtime pay for hours worked beyond 40 in a workweek.
The state of Arizona does not have specific state laws about meal or rest breaks for adult employees. Therefore the state follows the federal labor law Fair Labor Standards Act (FLSA). It does not require employers to provide meal or rest breaks for adult employees. Employers are free to offer breaks that follow applicable guidelines.
Meal breaks are unpaid if the employee is completely relieved of duties during the break. Otherwise, employees are entitled to pay during the meal break.
The FLSA does not require employers to give rest breaks to adult employees. If employers choose to give short rest breaks, they must pay the employees for the time.
Employers in Arizona will need to comply with any collective bargaining agreements, employment contracts, or industry-specific regulations that may require breaks.
Establishments that employ young workers must comply with the federal child labor laws which require breaks for young workers.
Arizona does not have a statewide law mandating paid leave for private-sector employees. However, there are federal laws and certain local ordinances that may impact paid leave in specific jurisdictions or for certain types of employees.
- Federal Family and Medical Leave Act (FMLA): The FMLA is a federal law that provides eligible employees with up to 12 weeks of unpaid, job-protected leave per year for certain family or medical reasons. While the leave is unpaid, employees may use accrued paid leave (such as sick leave or vacation) during FMLA leave.
- Arizona Sick Leave Laws (Local Ordinances): Some cities in Arizona, such as Tucson and Flagstaff, have enacted local ordinances that require employers to provide earned sick leave to employees. These ordinances typically specify the accrual rates and permitted uses of sick leave.
- Paid Time Off Policies: While not mandated by state law, many employers in Arizona choose to offer paid time off (PTO) as part of their benefits package. PTO may include vacation days, personal days, and sick days, and employers usually have policies outlining accrual rates and usage.
- Collective Bargaining Agreements: For employees covered by collective bargaining agreements, the terms related to paid leave and time off may be outlined in the agreement.
The classification of employees as exempt or non-exempt in Arizona follows the Fair Labor Standards Act (FLSA).
Exempt Employees:
- Salary Basis Test: Exempt employees are typically paid on a salary basis, meaning they receive a fixed salary that is not subject to reduction based on the quality or quantity of work performed.
- Salary Level Test: Exempt employees must earn a minimum salary to qualify for exemption. The minimum salary for exemption is $684 per week.
- Duties Test: Exempt employees must perform specific job duties that fall into one of the FLSA’s exempt categories, such as executive, administrative, professional, or certain computer-related duties.
Non-Exempt Employees:
- Hourly Pay: Non-exempt employees are typically paid on an hourly basis and are entitled to overtime pay for hours worked beyond 40 hours in a workweek.
- Overtime Pay: Overtime pay for non-exempt employees is generally calculated at 1.5 times their regular rate of pay for each hour worked beyond 40 hours in a workweek.
Arizona does not have a specific state Equal Pay Act. However, federal laws, including the federal Equal Pay Act (EPA) and Title VII of the Civil Rights Act of 1964, prohibit wage discrimination based on sex at the national level.
- Equitable Work: The EPA requires that men and women be given equal pay for equal work in the same establishment. The work must be substantially equal in terms of skill, effort, responsibility, and working conditions.
- Employers may only pay different wages for substantially similar work if the differential is based on a bona fide factor other than gender. Bona fide factors may include education, training, experience, or other job-related factors.
- In addition to the EPA, employers must also adhere to Title VII of the Civil Rights Act of 1964 that prohibits discrimination based on race, color, religion, and national origin.
Arizona follows employment-at-will, which means that, absent an employment contract or collective bargaining agreement specifying otherwise, either the employer or the employee may terminate the employment relationship at any time, with or without cause and with or without notice.
- Anti-Discrimination Laws: Employers in Arizona must comply with federal anti-discrimination laws, such as Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, religion, sex, or national origin. The Arizona Civil Rights Act provides additional protections. Termination decisions must comply with federal anti-discrimination laws, including those mentioned under hiring considerations.
- Work Eligibility Verification: Employers are required to verify the work eligibility of employees through the Form I-9 process in compliance with federal immigration laws.
- Final Paychecks: Employers are generally required to provide employees with their final paychecks promptly upon termination.
- Unemployment Benefits: Employees terminated through no fault of their own may be eligible for unemployment benefits. Employers must comply with requirements related to unemployment insurance.
- WARN Act: The federal Worker Adjustment and Retraining Notification (WARN) Act may apply to employers with 100 or more employees, requiring them to provide advance notice of plant closings or mass layoffs.
It is important for employers to remain well-informed about changes in employment laws and to seek guidance from legal professionals to ensure compliance with the latest regulations. It’s advisable to establish clear and meticulously documented employment policies and procedures to aid employers in complying with the labor laws.