At present, Arizona’s minimum wage is $10.00 per hour.

However, Arizona voters approved a ballot measure in November of 2016 that stands to raise the state’s minimum wage through 2020.

Minimum Wage

This voter-approved initiative was known as Proposition 206, which also gained attention for its provisions that require nearly all Arizona employers to provide paid sick leave to employees.

The end result of Proposition 206 was that hundreds of thousands of workers in Arizona received a raise in January of 2017.

Before Proposition 206, the minimum wage was $8.05 per hour.

The current minimum wage of $10.00 per hour is set to increase in the coming years, according to the following schedule:

  • $10.50 in 2018
  • $11 in 2019
  • $12 in 2020

In 2021, the state’s minimum wage will be adjusted on an annual basis according to Arizona’s cost of living each year.

While Arizona workers may be celebrating these recent changes, the new minimum wage law has already had its share of challenges.

The Arizona Supreme Court Rejected a Challenge to the State’s Minimum Wage Law

After Arizona voters passed Proposition 206, business groups challenged the new law on the grounds that it was unconstitutional.

The lawsuit, led by The Arizona Chamber of Commerce and Industry, asked for an overturn of the law.

Their claim was based on the notion that Proposition 206 violated the Arizona constitution’s requirement that voter initiatives that cost the state money must identify a funding source.

The state is exempt from this law, and the Arizona Supreme Court rejected the argument brought by these business groups.

As such, the newly increased minimum wage law has already successfully withstood a challenge in the early months since voters approved the new law.

Gov. Doug Ducey also opposed the law, but noted after the Arizona Supreme Court’s ruling that the court had spoken, saying “We’re going to follow the law.”

Now that the state’s Supreme Court has weighed in on the issue, it seems unlikely that the minimum wage change will see future legal challenges.

Who Can Receive the Increased Minimum Wage?

The new wage increase applies to all Arizona employers with the exception of small businesses.

Effectively, this means who is required to pay the minimum wage to employees has not changed, as this requirement aligns with the Arizona Minimum Wage Act.

Employers whose businesses generate less than $500,000 in gross sales and do not conduct interstate commerce can be viewed as small businesses.

Nearly all other businesses are required to pay employees at or above the new minimum wage limit.

That said, it is important to note that the new law has kept an old provision stating that says employees who receive tips can earn $3 less per hour than the state’s minimum wage.

However, an employer must be capable of proving that the employee is still earning at or above the state’s minimum wage once the tips received are taken into consideration.

For the vast majority of Arizona employees, however, the new law has already brought about a wage increase. Indeed, independent analysis conducted by the Grand Canyon Institute estimates that 650,000 Arizona workers have already seen the increase to $10 an hour.

If you have any questions about the new minimum wage law or Arizona employment law more broadly, contact Tyler Allen Law Firm, PLLC for a legal consultation.

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