Arizona Minimum Wage Laws
Arizona’s current minimum wage is $8.05. AZ Industrial Commission – Minimum Wage
Arizona minimum wage laws require an annual review of its minimum wage. The minimum wage must be increased by the percentage the cost of living has changed from the prior August to the August in the year the review is conducted. The cost of living change is based on the Consumer Price Index published by the U.S. Department of Labor. Any change to the minimum wage takes effect on January 1 of the following year. AZ Statute 23-363
Arizona employers must also comply with federal minimum wage laws, which currently sets the federal minimum wage at $7.25. See FLSA: Minimum Wage.
If an employer chooses to pay employees minimum wage, the employer must pay those employees in accordance with the minimum wage law, either federal or state, that results in the employees being paid the higher wage. In most instances in Arizona, the Arizona minimum wage will apply as it generally guarantees a higher wage rate for employees than federal law.
Tip minimum wage
Arizona’s current minimum wage for tipped employees is $4.90. AZ Statute 23-363(C) In addition to paying this wage, employers must ensure that tipped employees are paid the regular minimum wage rate of $7.90 when the tipped wage rate is combined with tips received. If the tipped wage plus tips does not meet the regular minimum wage threshold, the employer is required to make up the difference. AZ Statute 23-363; AZ Admin. Code R20-5-1206(B)
Employers may only pay the tipped minimum wage to employees who customarily and regularly receive tips or gratuities from customers and if the employee receives the tip free of the employer’s control as to how the tip may be used. AZ Statute 23-363(C); AZ Admin. Code R20-5-1207(B)(1)-(2) Employees are considered to receive tips customarily and regularly if they receive tips on a consistent and recurrent basis that is more than occasional but can be less than constant. Examples of occupations that typically qualify for tipped wage rate include, but are not limited to, waiters, waitresses, bellhops, busboys, car wash attendants, hairdressers, barbers, valets, and service bartenders. AZ Admin. Code R20-5-1207(A)
Arizona minimum wage laws require employers to provide notice to employees when they are hired or first assigned to a position that customarily and regularly receives tips that they will be paid the tipped minimum wage or any wage greater than the tipped minimum wage but less than the standard minimum wage. Thereafter, the employer must provide such tipped employees written notice each pay period of the amount per hour the employer has taken as a tip credit (the difference between the standard minimum wage and the hourly wage paid the employee). AZ Admin. Code R20-5-1207(C)
Tip pooling and sharing
Arizona minimum wage laws allow employers to require or permit employees to pool, share, or split tips. The amount each employee receives after the tips are split is considered the tips of the employee for reporting purposes. AZ Admin. Code R20-5-1207(B) Employers may require employees who customarily and regularly to share tips with employees who do not customarily and regularly receive tips, such as managers and food preparers; however, the employer may not pay the tipped minimum wage to the employees who do not customarily and regularly receive them. AZ Admin. Code R20-5-1207(B)(4)
Employees with disabilities
In most instances, Arizona minimum wage laws do not permit employers to pay employees with disabilities a subminimum wage rate that is less than the standard minimum wage. However, in certain limited situations, employers may have individuals with disabilities perform work-related activities without compensating them. These limited situations exist when the individuals engage in the work primarily for their own benefit and not for the benefit of the employer and when the employer receives no immediate advantage from the individuals work. See AZ Industrial Commission of Arizona
Arizona law does not allow employers to pay trainee employees a subminimum wage rate that is less than the standard minimum wage.
Arizona minimum wage laws do not allow employers to pay apprentice a subminimum wage rate that is less than the standard minimum wage.
Arizona minimum wage laws do not allow employers to pay learners a subminimum wage rate that is less than the standard minimum wage.
Arizona minimum wage laws do not allow employers to pay student learners a subminimum wage rate that is less than the standard minimum wage.
Arizona minimum wage laws do not allow employers to pay student workers a subminimum wage rate that is less than the standard minimum wage.