ARIZONA MINIMUM WAGE 2022

Understanding the minimum wage laws in Arizona

Arizona Minimum Wage Laws 2022

Arizona is one of the few states in the US which has drafted the Fair Wages and Health Family Act (FWHFA) to help Arizonans keep up with the rising cost of living and hike the minimum wage in January 2017. While the federal minimum wage is stagnant at $7.25 per hour, the data shows that a single adult should make over $11.00 per hour to provide for their own needs.

Managing labor compliance at large organizations in Arizona may lead to legal issues. Learn how organizations are leveraging Replicon’s solutions with built-in compliance modules to solve Arizona’s minimum wage needs.

What is the 2022 minimum wage in Arizona?

The current minimum wage in Arizona is $12.80 per hour which is $5.55 more than the federal minimum wage. Post-2020, the minimum wage will rise each annually on 1st January based on the annual increase in the cost of living which is measured by the percentage increase in the Consumer Price Index from August of the preceding year over the level from August of the previous year.

What is Consumer Price Index?

According to the US Bureau of Labor Statistics, the Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. The Consumer Price Index is managed by the Bureau of Labor Statistics, which is a division of the US Department of Labor.

arizona minimum wage laws

Minimum Wage Increase Schedule

As of January 1st, 2019, the minimum wage in Arizona rose to $11.00 per hour. Post-2020, in the subsequent years, the minimum wage is set to increase based on the annual increase in the cost of living. Here, the increase in the cost of living is measured by the percentage increase in the CPI (Consumer Price Index) from August of the immediately preceding year over the level from August of the previous year.

How is Arizona’s minimum wage changing in the future?

In accordance with the Fair Wages and Health Family Act (FWHFA) and in consideration with the Consumer Price Index (CPI), Arizona will hike the wage to $11.00 in 2019 and then $12.00 in 2020. Later, beyond 2021, Arizona will raise its wages based on the cost of living.

However, Flagstaff has passed its own legislature, which will see it reach a minimum wage of $15.50 by the year 2022. Beyond that, the wage increase will be based on the cost of living and inflation (consumer price index).

Flagstaff Minimum Wage Schedule

Effective Date Minimum Wage Tipped Minimum Wage
1st Jan 2022 $15.50 $13.00
1st Jan 2023 To Be Determined by Consumer Price Index (CPI)* $2.00 less than the Hourly Minimum Wage
1st Jan 2024 To Be Determined by Consumer Price Index (CPI)* $1.50 less than the Hourly Minimum Wage
1st Jan 2025 To Be Determined by Consumer Price Index (CPI)* $1.00 less than the Hourly Minimum Wage
1st Jan 2026 and Afterward To Be Determined by Consumer Price Index (CPI)* Same as Hourly Minimum Wage

*Or $2.00 above the State of Arizona minimum wage, whichever is higher

Minimum Wage for Tipped Employees

Under Arizona’s minimum wage law, an employer is allowed to reduce the base wage of up to $3.00 less than that of the minimum wage to tipped employees. That means, as of 1st Jan 2019, the minimum wage of tipped employees cannot be less than $8.00 per hour. The minimum wage for tipped employees of Arizona in 2022 is $9.80

arizona minimum wage laws 2019

An employer is required to inform their employees at the time of hire, promotion, or transfer to a position that qualifies them for the tipped minimum wage. Also, the employer is required to inform the reduced base pay on each paycheque along with a confirmation that your tipped pay bought you the total pay above the minimum wage.

Exceptions To The Arizona Minimum Wage

Under Arizona’s minimum wage law, certain employees and employers are exempt from the Arizona minimum wage. They are

  • Tipped Employees: Employees who make a significant portion of their income in tips, ex: waiters, taxi drivers, bartenders, etc.
  • Family Business: Employees who work for their parents or siblings.
  • Babysitting: Babysitters in Arizona are also exempt from the minimum wage, although the Arizona Minimum wage law clearly differentiates between a casual babysitter and a regular nanny.
  • Small Business: Businesses accounting for $500,000 or less in gross annual revenue are considered to be small businesses and employers of such businesses are not entitled to Arizona’s minimum wage.
  • Government Employees: Both state and federal government employees are exempt from the Arizona minimum wage. They fall under federal employment law and not Arizona state law.

Frequently Asked Questions on Arizona State Minimum Wage and Labor Laws:

  1. What is the Arizona minimum wage in 2022?
    1. The current minimum wage in Arizona is $12.80 per hour which is $5.55 more than the federal minimum wage.
  2. How much does minimum wage go up every year in Arizona?
    1. Post-2020, the minimum wage will rise each year on 1st January based on the annual increase in the cost of living which is measured by the percentage increase in the Consumer Price Index from August of the preceding year over the level from August of the previous year.
  3. What is the minimum wage for tipped employees in Arizona?
    1. The minimum wage for tipped employees in Arizona for 2022 is $9.80
  4. What is the Consumer Price Index?
    1. The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
  5. Do Servers make minimum wage in Arizona?
    1. Yes, but Under Arizona’s minimum wage law, an employer is allowed to reduce base wage of up to $3.00 less than that of the minimum wage to tipped employees.
  6. Who is an exempt employee in Arizona?
    1. Under Arizona’s minimum wage law, certain employees and employers are exempt from the Arizona minimum wage. They are tipped employees, babysitters, family businesses, small businesses (gross annual income is $500,000 or less), and government employees.

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