Arizona's Minimum Wage Increased in 2012
By: Gary J.
Jaburg, Esq.
In 2006, the Raise the Arizona Minimum
Wage for Working Arizonans Act became law. In part it
provided for interim increases in the Arizona's minimum wage.
As of January 1, 2012, the minimum wage in Arizona became $7.65 per
hour. The Act provides for increases in Arizona's minimum
wage based on cost of living increases and uses the Department of
Labor, Consumer Price Index of All Urban Consumers (CPI-U).
Arizona's rate is .40 cents per hour higher than the federal
minimum wage and you are required to pay the higher of the two wage
rates.
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 (FLSA) 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 very
narrow and limited. Under 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.
Enforcement by the Industrial Commission
Penalties are fairly high and AMWA includes protections
for employees for retaliatory claims. Current penalties are
at least $250 for the first violation and at least $1,000 for each
subsequent or willful violation. Additionally, 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.
Employers with questions are encouraged to contact the
Commission at 602.542.4515 or visit their website at www.ica.state.az.us.
What do I need to do?
In addition to paying the correct Arizona minimum wage,
employers are required to:
About the author: Gary
Jaburg is an attorney and the managing partner of the Phoenix
law firm of Jaburg Wilk.
He assists clients with their business
issues including employment
law. Gary can be reached at gjj@jaburgwilk.com or
602.248.1020.
This article is not intended to provide legal advice and
only relates to Arizona law. It does not consider the scope of laws
in states other than Arizona. Always consult an attorney for
legal advice for your particular situation. This
policy is written based on Arizona law for Arizona
employers.
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