Introduction to employment laws in Arizona
Overview
Known for its business-friendly environment, Arizona’s labor laws make it attractive for businesses to function in the state while still maintaining essential worker protections.
While the state’s policies may not be as stringent as those in some other states, understanding and adhering to these regulations is vital for employers to ensure a compliant and harmonious workplace.
Employing in Arizona: Key employment laws and practices
Standard work hours
Under Arizona law, full-time employment is typically defined as between 30-40 hours per week. However, the actual hours can vary depending on the nature of their role or industry. For contractual or part-time employees, their work hours will depend on the terms set out in their contracts.
For self-employed professionals or freelancers, work hours are often more flexible and determined by individual project or task requirements.
Minimum wage and overtime
As of 2024, the minimum wage in Arizona is $14.35 per hour ($9.35 for tipped employees). Employers must ensure that all eligible employees receive this minimum wage, regardless of the number of hours worked.
Overtime pay applies when an employee works more than 40 hours in a week. Under the federal Fair Labor Standards Act (FLSA), non-exempt employees are entitled to 1.5 times their regular pay rate for any overtime hours worked.
Insurance and benefits
In Arizona, employers are required to provide certain types of insurance coverage, such as workers’ compensation insurance and unemployment insurance.
Although these aren’t mandatory under state law, employers often voluntarily provide additional benefits like health, dental, and vision insurance as well as retirement plans.
Benefit | Legal requirement |
Workers’ compensation insurance | Yes |
Unemployment insurance | Yes |
Health insurance | No |
Dental insurance | No |
Vision insurance | No |
Retirement plan | No |
Meal and rest periods
Arizona employment laws do not specifically mandate meal and rest breaks for employees.
However, federal law, more specifically the Fair Labor Standards Act (FLSA), provides guidelines that Arizona employers can follow voluntarily or when the nature of work requires breaks.
The FLSA suggests a short break of 5 to 20 minutes be considered as compensable work hours. It also suggests that a bona fide meal period (typically 30 minutes or more) is not work time and therefore not compensable.
Anti-discrimination laws
Arizona has strict anti-discrimination laws in place to protect its workforce. The Arizona Civil Rights Act prohibits employment discrimination on the basis of race, color, religion, sex (including pregnancy and maternity), age (40 and over), national origin, disability, and genetic test results.
This law applies to employers with 20 or more employees. For sexual harassment claims, even employers with only one employee fall under ACRA’s jurisdiction.
The law also provides protection for employees who engage in whistleblowing activities or those who participate in investigating unlawful discrimination within their workplace.
Multiplier makes it easy to manage benefits for Arizona employees.
Leave policies
Arizona employment laws provide several types of leave for employees. The most notable is the state’s paid sick leave law under the Fair Wages and Healthy Families Act. Under the Arizona labor law regarding sick leave, eligible employees may take leave for
- The medical care or mental or physical illness, injury, or health condition of the employee or any of the employee’s family members
- A public health emergency, as defined by Arizona Revised Statutes § 23-373, affecting the employee or a family member
- An absence due to domestic violence, sexual violence, abuse, or stalking involving the employee or any of the employee’s family members
In addition to paid sick leave, other state-mandated leaves include crime victim leave (for employers with 50 or more employees), voting leave, jury duty leave, and military leave.
Leave type | Details |
Sick leave | Up to 40 hours of paid sick leave for larger employers; up to 24 hours for smaller employers |
Crime victim leave | Available for employers with 50 or more employees; allows employees to attend court proceedings |
Voting leave | Three hours of paid time off on election day |
Jury duty leave | Time off as needed for jury service; unpaid but job-protected |
Military leave | Time off as required for military service or training |
Termination laws
Arizona follows the federal “employment-at-will” doctrine, which means that either the employer or employee can terminate the employment relationship at any time and for any reason, as long as the reason is not illegal.
In Arizona, employees who quit must be paid by the next regular payday, while those who are fired must be paid within seven business days or by the next regular payday, whichever is sooner. An employer does not have to pay a separated employee for unused vacation or sick leave unless it is stated in the company policy.
Easily onboard employees in Arizona?
Safety and health
Apart from OSHA, Arizona has specific health and safety laws in place to protect employees.
The Smoke-Free Arizona Act, for instance, prohibits smoking in all public places and workplaces. Employers are required to post no-smoking signs at all entrances to buildings. Additionally, Arizona law allows employees to keep legally owned firearms in their locked, personal vehicles while parked at work.
Arizona also has a law prohibiting the use of wireless communication devices while driving on public roads. This includes texting and watching or recording videos. Employers should ensure their employees are aware of these regulations for their own safety and to prevent legal liabilities.
Taxes in Arizona
Employers in Arizona are responsible for withholding and remitting the Federal Income Tax, State Income Tax, Federal Unemployment Tax Act (FUTA), State Unemployment Tax Act (SUTA), Medicare tax, and Social Security tax.
Type of tax | Employee rate | Employer rate |
Federal income tax | Progressive tax up to 37% | N/A |
State income tax | Progressive tax from 2.59% to 4.50% | N/A |
FUTA | N/A | 0.6% on the first $7,000 paid to each employee |
SUTA | N/A | Varies based on employer’s experience rating |
Medicare | 1.45% | 1.45% |
Social Security | 6.2% up to $142,800 per year | 6.2% up to $142,800 per year |
Managing Arizona employees with an Employer of Record (EOR)
When hiring employees in Arizona, understanding state-specific employment laws is crucial. Partnering with Multiplier can significantly simplify this process.
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FAQs
In Arizona, full-time employment is typically between 30 and 40 hours per week as per state law. However, these hours can vary depending on the specific industry or job type.
Overtime laws in Arizona align with the federal FLSA or Fair Labor Standards Act. Non-exempt employees are entitled to 1.5 times their regular pay rate for hours worked beyond 40 per week. However, certain exempt roles based on salary thresholds and job responsibilities may not be eligible for overtime.
Currently, the minimum wage for private sector employees in Arizona is $14.35 per hour. This rate is subject to periodic increases based on inflation.
Businesses must comply with the Arizona Civil Rights Act (ACRA), which prohibits discrimination based on characteristics including race, color, religion, sex, age, national origin, disability, and genetic test results. The ACRA aligns closely with federal law and applies to employers with 15 or more employees.
Arizona has specific child labor laws that restrict the occupations in which minors can work and the number of hours they can work. Minors under 16 have specific restrictions regarding work hours, and they cannot be employed in hazardous occupations without certain variances being granted.
