AZ Minimum Wage Increase
As we close out 2019 business owners in Arizona need to ensure their payroll rates for the coming year reflect the scheduled increase. Effective January 1, 2020, Arizona’s minimum wage will increase to $12.00 for non-tipped employees and $9.00 for tipped employees after the allowable tip credit is applied. State law supersedes the lower federal rate and minimum wage earners must be paid at the higher state rate.
Importantly, note that Arizona counties, cities or towns may implement a higher rate in their geographical areas by ordinance. At this time only the City of Flagstaff has set their own minimum wage schedule (approved by voters) reflecting an increase to $13.00 per hour for workers.
The Arizona Minimum Wage has several exemptions allowing certain employees to be paid less than minimum wage, as follows:
- Casual domestic employees, like babysistters, and individuals employed by their parents or siblings
- Employees of the state or federal government, including students that work for universities
- Employees of small businesses that gross under $500,000 a year AND are not subject to the FLSA (Fair Labor Standards Act). As most all businesses are covered by FLSA this is a very limited exemption.
Also be sure you have your updated approved Arizona minimum wage poster prominently displayed for your employees. Need help navigating the ins and outs of payroll? Reach out today!
