Arizona’s minimum wage will increase by fifteen cents per hour to $12.15 per hour on January 1, 2021. This is because the Fair Wages and Healthy Families Act provides for a cost-of-living increase on January 1 of each year after 2020.

This means that Arizona employers will need to start paying the higher minimum wage for all hours worked after January 1, 2021. Although workers who are tipped can be paid at a lower hourly rate, their total compensation, including tips, must be equal to or greater than Arizona’s minimum wage.

Some Arizona cities, such as Flagstaff, have a higher minimum wage. On January 1, 2021, Flagstaff employers must pay $15.00 per hour.

It is important to note that the federal minimum wage ($7.25 per hour) is lower than the Arizona minimum wage. Arizona employers must pay the higher of the federal or state mandated minimum wage, which means Arizona employers must now pay $12.15 per hour.

Arizona employers must also post a poster in a conspicuous place. With many employees working remotely, employers should include a link to the poster with their employees’ paychecks or through an employee intranet or portal. The poster is available for free, and an employer can face fines and penalties if they fail to post it in a conspicuous place and/or make it reasonably available to employees working from home.

The failure to comply with wage laws can be very costly for employers. An employee can recover three times the amount they should have paid. Employees can also recover an award of attorney fees, which can often equal or exceed the amount in controversy.