What Does The New Minimum Wage Law Mean For Arizona Employers?

On November 8, 2016, Arizona voters voted to enact the Fair Wages and Healthy Families Act. This Act made amendments to the minimum wage laws. It provides a raise in the minimum wage for Arizona workers beginning January 1, 2017. It also gives workers the legal right to use a minimum amount of sick time pay benefits each year. This begins in July 2017.

Increased Minimum Wage in Arizona

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Who Does it Apply To?

The minimum wage increase applies to all Arizona employers, except small businesses that earn less than $500,000 in gross sales and that are not involved in interstate commerce. The provision of paid sick time applies to all employers, regardless of their business’s size.

Minimum Wage Increase

For Arizona workers not exempt from the minimum wage raise, the requirements to raise minimum wage are as follows:

  • $10.00 per hour on and after January 1, 2017 ($7.00 per hour plus tips for tipped employees);
  • $10.50 per hour on or after January 1, 2018  ($7.50 per hour plus tips for tipped employees);
  • $11.00 per hour on or after January 1, 2019 ($8.00 per hour plus tips for tipped employees);
  • $12.00 per hour on or after January 1, 2020 ($9.00 per hour plus tips for tipped employees); and,
  • Continued incremental increased based on the cost of living on January 1st of each following year.

Mandatory Paid Sick Time

Any employer that does not already have a paid sick time policy will be required to create one,or revise their policy to meet the new standards before July 1, 2017. The Act also requires that employers include the amount of their employees’ acquired PST, the amount of PST used by employees and the amount of pay an employee has received as earned PST on employee pay statements.

Under the new act, PST acquires at a rate of no less than one hour for every 30 hours actually worked by the employee. If an employee is not full-time and working less than 40 hours per week, his or her PST accrues based on the actual number of hours worked in that normal workweek.


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