Arizona Overtime and Labor Laws
While Arizona state wage laws follow federal law in many respects, state laws are more favorable to workers than federal laws in several areas including, providing a higher minimum wage, an extended statute of limitations for minimum wage violations, and the potential for employees to recover triple damages on claims for unpaid back overtime wages (federal law allows for double damages).
What’s in This Article
a table of contents
Minimum Wage Regulations
In November 2016, Proposition 206 was passed increasing the Arizona minimum wage to $10 per hour effective January 1, 2017. It continues to increase as noted below until January 1, 2021, when it will be adjusted for the cost of living.
- 2014 $ 7.90
- 2015 $ 8.05
- 2016 $ 8.05
- 2017 $10.00
- 2018 $10.50
- 2019 $11.00
- 2020 $12.00
- 2021 $12.15
- 2022 $12.80
When an employer claims a tip credit, it may pay up to $3.00 per hour less than minimum wage to employees who customarily and regularly receive tips, as long as the tips plus wage is not less than the minimum wage. The following classes of individuals are not subject to Arizona’s minimum wage:
- Employees who work for a parent or sibling
- Employees who provide babysitting services in the employer’s home on a casual basis
- Employees employed by the government of the United States or by the State of Arizona
City of Flagstaff Minimum Wage
On January 1, 2018, the minimum wage in the city of Flagstaff increased to $11 per hour. It will increase to $12 in 2019, $13 in 2020, $15 (or $2 above the state minimum wage) in 2021, $15.50 (or $2 above the state minimum wage) in 2022, and be adjusted thereafter based on the consumer price index.
City of Tucson Minimum Wage
Per a ballot initiative approved on November 2, 2021, the minimum wage in the city of Tucson will gradually increase to $15 per hour by 2025 and then increase based on the rate of inflation after 2025. Tucson’s minimum wage will be $13.00 per hour as of April 1, 2022; $13.50 as of January 1, 2023; $14.25 as of January 1, 2024; and $15 as of January 1, 2020.
Arizona follows the Federal law. Employers must pay all non-exempt employees overtime pay for all hours worked in excess of 40 in a workweek at one and a half the employee’s regular wage.
Are You Owed Back Overtime Wages?
Specific Exemptions from the Overtime Requirement
If an exemption from the overtime requirement is met by an employee, his or her employer does not have to pay overtime. The most common exemptions to the overtime pay requirement are usually for:
- Partsmen and mechanics
- Administrative employees
- Executive employees
- Professional employees
While salaried Administrative, Executive, and Professional employees can be exempt under federal law, they are not exempt from the Arizona minimum wage regulations. This means these employees must be paid a salary that equates to at least minimum wage for all hours worked. This could result in a higher salary requirement than federal law. For example, as of 2018, the Arizona minimum wage was $10.50/hour. If an Administrative, Executive, or Professional employee was required to work at least 50 hours per week, their salary would have to be at least $525/week which would be higher than the 2018 federal salary requirement of $455*/week.
* The Department of Labor under the Obama Administration increased this salary amount to $913 per week effective 12/1/2016; however, this increase was blocked by a court ruling. Instead, the Trump Administration only increased the salary amount to $684 per week effective 1/1/2020. Please see this page for the latest updates.
Holidays / Vacation / Sick Leave
In Arizona, employees may work on weekends or holidays without receiving additional pay. Employers are also not required to offer holiday or vacation paid time off. Because these policies are at the discretion of the employer, a “use-it-or-lose-it” vacation policies requiring employees to use vacation days by a set date or lose them is permissible, so long as the employee has a reasonable time to use the vacation.
In November 2016, Arizona passed the Fair Wages and Healthy Families Act which requires employers provide paid sick leave.
Arizona employers with 15 or more employees must allow employees to accrue up to 40 hours of earned paid sick time per year at a rate of 1 hour of paid sick time for every 30 hours worked. Employers with fewer than 15 employees must allow employees to accrue up to 24 hours paid sick time at a rate of 1 hour of paid sick time for every 30 hours worked.
Meal Breaks / Rest Periods
Arizona law does not regulate or require employee breaks or lunch periods. However, if breaks are given, employers must follow the Federal requirement that when breaks of 20 minutes or less are given, they must be paid. If the employee is relieved of all duties, meal breaks of 30 minutes or more may be unpaid.
Employers are not required to pay employees while complying with a jury summons or serving on a jury, but the employees may not be discharged for these reasons. Employers may not require employees to use vacation or sick leave to comply with a jury summons. Further, employees may not lose seniority while serving on a jury.
Reporting Time Pay
Neither Arizona nor the Federal law requires payment if an employee reports to work expecting to work for a certain number of hours but does not get to work their full schedule.
Under Arizona law, all Arizona-based employers must pay their employees at least twice per month, no more than 16 days apart. If a payday falls on a holiday, the employer must pay the employee prior to the scheduled payday.
Arizona does not require employers to provide severance pay, but discharged employees must receive all due wages within three working days or by the end of the next pay period, whichever is sooner. Employees who quit must be paid all due wages by the next payday.
Arizona does not address specifically types of deductions that may be taken but the FLSA states that deductions cannot reduce an employee’s wage below minimum for items such as shortages, uniforms, trade tools, or damaged goods.
Statute of Limitations
The statute of limitations under Federal Law provides that overtime claims can be made for the prior 2 years, or 3 years if the violation is willful.
Under Arizona’s wage law, employees must file a lawsuit to enforce their:
- Overtime pay rights no later than 1 year after a violation in order to recover treble damages (3x backpay)
- Minimum wage rights no later than two years after a violation last occurs, or three years in the case of a willful violation, and the claim may encompass all violations that occurred as part of a continuing course of employer conduct regardless of their date.
State Law Remedies / Penalties
The remedies provided by Arizona labor law for both overtime pay violations and minimum wage violations can be more favorable to workers than federal law (as detailed above), giving them the right to recover up to triple damages for overtime pay violations and permitting claims for minimum wage violations to go back more than 2-3 years where there is a continuing course of conduct.
The remedies under Federal law for overtime violations are also available in Arizona. In most cases, a plaintiff is entitled to an award of liquidated damages equal to the amount of unpaid overtime, meaning its possible to receive two times the amount of unpaid overtime. A successful plaintiff can also be awarded attorney’s fees and expenses.