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Minimum Wage: Don’t Overlook Arizona’s Higher Requirement

Where there is a difference between the federal and state minimum wage, the higher of the two applies.

Date: November 2014

For much of 2014, there has been a great deal of nationwide controversy about the minimum wage, from the fast food workers’ movement concerning wage inequality to Congress’s inaction on raising the federal minimum wage from $7.25 per hour.

Many states, including Arizona, have a higher minimum wage than that set at the federal level. Where there is a difference between the federal and state minimum wage, the higher of the two applies.

In 2006, Arizona voters approved a proposition that permitted the Industrial Commission to set the minimum wage, under A.R.S. § 23-364(A). The Industrial Commission increases the state’s minimum wage annually, and on January 1, 2015, it will rise from $7.90 per hour to $8.05. The Industrial Commission’s rules are found in the Arizona Administrative Code at R20-5-1201 through 1220

Unlike federal law, which provides many exceptions to the requirement to pay the federal minimum wage, Arizona law allows very few exceptions:

  • casual babysitters,
  • people working for a sibling or parent,
  • state or federal employees, and
  • businesses with gross revenues less than $500,000 per year, provided the business is not covered by the federal Fair Labor Standards Act (this is not common).

Penalties

As most employers know, penalties for failure to pay overtime are heavy, but many employers are not aware of the very serious consequences for failure to comply with the state minimum wage. Such claims under Arizona’s law involve payment of double damages, as well as an ability for the employee to recover back wages for an extended period of time, if the employer engaged in a continuing course of conduct by not paying minimum wages. Anti-retaliation provisions are also very stringent, providing high protection for employees who question whether they are receiving the minimum wage.​

Notification

Employers must put up a new poster for the 2015 minimum wage. The downloadable poster will be available at the Industrial Commission website.

Do NOT follow this link or you will be banned from the site!