Arizona Minimum Wage 2023

Arizona Minimum Wage Laws 2023

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 for the Year 2023?

The current minimum wage in Arizona is $13.85 per hour, which is $6.6 more than the federal minimum wage. It raised from $12.80 to $13.85 effective from January 1, 2023. An increase of $1.05 in the minimum wage is based on the inflation that occurred between August 2021 to August 2022. Post-2020, the minimum wage is rising 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 the 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.

Minimum Wage Increase Schedule

Until January 1, 2019, the minimum wage in Arizona rose to $11.00 per hour. Post-2020, in the subsequent years, the minimum wage is increasing 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 increased the wage to $11.00 in 2019 and then $12.00 in 2020. Post 2021, Arizona is raising its wages based on the cost of living.

However, Flagstaff had passed its own legislature, with a motive to raise a minimum wage of $15.50 by the year 2022. Now, the wage increase is going to be made based on the cost of living and inflation (consumer price index).

Flagstaff Minimum Wage Schedule

Effective Date	Minimum Wage	Tipped Minimum Wage
January 1, 2022	$15.50	$13.00
January 1, 2023	$16.80	$14.80
January 1, 2024	To Be Determined by Consumer Price Index (CPI)*	$1.50 less than the Hourly Minimum Wage
January 1, 2025	To Be Determined by Consumer Price Index (CPI)*	$1.00 less than the Hourly Minimum Wage
January 1, 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 2023

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. However, the added sum of tips and wages paid to these employees must not be less than the minimum wage. The tipped wage for tipped employees of Arizona for year 2023 is $10.85.

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 pay cheque along with a confirmation that your tipped pay brought 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 2023?

The current minimum wage in Arizona is $113.85 per hour, which is $6.6 more than the federal minimum wage.

2. How much does minimum wage go up every year in Arizona?

Post-2020, the minimum wage is rising 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?

The minimum wage for tipped employees in Arizona for 2023 is $10.85 per hour

4. What is the Consumer Price Index?

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?

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?

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.