How Minimum Wage Increases Affect Tipped Employees In Arizona

In 2016, Arizona voted in favor of Proposition 206 to not only increase minimum wage each year, but also guarantee benefits like paid sick time. For most 9-5’ers this is a pretty black and white adjustment, but for service industry workers and other tipped employees, this can be a bit more complicated. 

As a tipped employee, it’s imperative you keep track of the annual minimum wage increases and your current hourly rate. If your hourly rate falls below the minimum wage, your employer is legally bound to pay you the difference. This is also the case if you’re being asked to do work outside of your role that does not directly contribute to your tips. 

You should know that if you’re on the clock as a tipped employee and constantly being asked to do work that is not “tip producing work” (i.e. your job or related side work) your employer may be taking advantage of your low wage. Believe it or not, there are laws in place to make sure that you are being paid fairly for your hard work and making at least minimum wage at all times. 

If you think your employer is taking advantage of your hourly wage, or is not paying you the legal minimum, you should consult with an employment lawyer to see what your options are. You don’t have to defend yourself or take this on alone. An experienced employment lawyer is not only knowledgeable about state law but will defend your rights as a hard working employee and get you the money you deserve. 

Minimum Wage For Tipped And Non-Tipped Employees in Arizona

As of January 2022, the minimum wage in Arizona is $12.80 per hour for all non-tipped employees. Unfortunately, whether you’re a tipped employee or not has a big impact on your hourly rate. If you are receiving tips for your hard work, your employer only needs to prove you’re consistently earning above minimum wage to claim a tip credit to reduce your hourly wage. 

For example, the hourly rate for tipped employees is only $9.80. This means that as long as you are regularly earning an extra $2 per hour in tips, your employer does not have to pay you the legal minimum of $12.80 per hour. Sadly, because of the lower hourly rate, this also means tipped employees are the most likely to be exploited. As a tipped employee, you should always track your hourly earnings and make sure you’re not falling below the minimum. Not only should you be keeping record of your hourly rate but also the kind of work you’re performing on the clock. The Department of Labor has specific laws and regulations in place to make sure you’re being paid fairly no matter what kind of work you’re doing. The D.O.L. refers to this as tip producing work and non-tip producing work. 

What is Tip Producing Work vs Non-Tip Producing Work 

Tip producing work is work that is directly related to your job and ability to earn tips. For example taking orders as a server, making drinks as a bartender, doing a manicure as a nail technician and any related side work like rolling silverware, stocking glasses, or cleaning your workstation. Non-tip supporting work, on the other hand, is performing duties outside your role, such as, cleaning hotel rooms as a valet, cleaning bathrooms as a server, or ordering shop supplies as a receptionist. 

Known as the 80/20 rule, if you’re being asked to perform non-tip supporting work for more than 30 minute durations, or exceeding more than 20% of your total weekly hours, according to the Department of Labor, you are entitled to the full minimum wage pay. 

If you have kept accurate and detailed records of the work you performed, you should first speak with your manager or HR department. If that doesn’t resolve the issues, then contact a specialized employment lawyer immediately. 

How and Arizona Employment Lawyer Can Help Your Case

The employment lawyers at Thunderbird Law Group should be your go to for anything related to discrimination, harassment, equal and fair pay, and other discrepancies in the work place. They have the experience and specialized knowledge to defend your case and protect your rights as an Arizona employee. 


Legal issues can be very timely matters that require immediate attention – the faster you begin pursuing resolutions, the better your chances of obtaining them. Contact us for further information.

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