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Home / News & Events / Arizona’s Minimum Wage Increased 2009

Arizona's Minimum Wage Increased 2009

As of January 1, 2009, the minimum wage in Arizona became $7.25 per hour. Arizona's minimum wage law ("AMWA") has some important variations from the federal minimum wage law.

The following entities are exempt from this law:

• A person employed in a small business not subject to the Federal Fair Labor Standards - Act and which has less than $500,000 in gross annual revenue;
• A person who is employed by a parent or a sibling;
• A person who is employed performing babysitting services in the employer's home on a casual basis;
• A person employed by the State of Arizona or the United States government; and There are also special rules regarding "tipped" employees.

Small Business Exemption

The exclusion for small businesses under the AMWA is limited. Under the FLSA, coverage extends in one of two ways. Employees who work for an "enterprise" that is engaged in interstate commerce or the production of goods for commerce are covered under the FLSA. Likewise, regardless of the volume of sales of an enterprise, individual employees whose work affects interstate commerce are covered under the FLSA

Recordkeeping Requirements

The records required under the AMWA consist of information that employers are generally presumed to maintain in their ordinary business practice and are similar to the requirements under FLSA. An employer must maintain payroll records showing the hours worked and wages paid, including basic time and earning cards or sheets, wage rate tables, records of additions to or deductions from wages paid and any written agreement relied upon to calculate credits toward the minimum wage. Separate recordkeeping requirements are permitted for employees on fixed schedules and employees who are compensated on a salary basis at a rate that exceeds the minimum wage and who, under the FLSA, are an exempt bona fide executive, administrative, or professional employee, including an employee employed in the capacity of academic administrative personnel or teachers in elementary or secondary schools, or in outside sales. Arizona requires these records be kept for four years - one year longer than federal law requires.

The Industrial Commission of Arizona ("Commission") has provided the opportunity to small businesses to reduce or waive the recordkeeping requirements if the Commission believes the business would be unreasonably burdened by the requirements. Unfortunately, this relief is only offered on a case-by-case basis. The small business must file a petition for relief with the Commission.

Enforcement by the Industrial Commission

Penalties are fairly high and AMWA includes protections for employees for retaliatory claims. The employer may be ordered to pay unpaid wages and civil penalties. Additional equitable relief that could be awarded can include injunctions, special reporting requirements or monitoring requirements, special notices to employees or other remedial measures for employers. All civil penalties levied by the Commission shall be retained by the Commission for use to finance the enforcement of the AMWA.

Employers with questions are encouraged to contact the Commission at (602) 542-4411.

What do I need to do?

In addition to paying the correct Arizona minimum wage, employers are required to:

• Furnish in writing the business name, address, and phone number to all employees upon their hiring;
• Keep accurate records of employee wages and hours;
• Allow the Labor Department of the Industrial Commission of Arizona ("Department") to inspect, at the worksite, all payroll records;
• Furnish copies of payroll records requested by the Department;
• Cooperate with the Department's investigation into complaints of violations;
• Allow the Department to interview employees; and
• Post the Arizona Minimum Wage Poster in a conspicuous place where employees can read the poster.