2021/2022 – Understanding the Arizona Minimum Wage

Arizona is one of the states in the nation that has automatically incremented the minimum wage with time. Currently their minimum wage is $12.15 per hour, nearly $5 greater than the federal minimum wage. The federal minimum wage currently is at $7.25 per hour. Effective January 1st of 2022, the standard minimum wage of the Grand Canyon State is going to increase to $12.80 per hour. 

Understanding the Minimum Wage Scenario in Arizona

During the past few years, Arizona has managed to sustain the decisions related to minimum wage according to the Fair Wages and Healthy Families Act –Proposition 206, a ballot initiative that was given approval by over 58 per cent of voters way back in 2016. 

The historical increase in the minimum wage since the passing of the Fair Wages and Healthy Families Act in Arizona is as follows:

DateRate
1st January 2017$10.00
1st January 2018$10.50
1st January 2019$11.00
1st January 2020$12.00
1st January 2021$12.15

For the year 2021, the increase in minimum wage in Arizona was measured based on the overall cost of living. At the start of 2022, it will become $12.80 per hour. However, with most cities across the nation achieving the $15 per hour mark for minimum wages, some legislators in Arizona are thinking about taking more action. For example, the Flagstaff locality in Arizona has passed the initiative of the $15 minimum wage scenario and Tucson is close behind.

Minimum Wages Types in Arizona

All minimum wage employees in Arizona do not make the same amount per hour. Some individuals might earn a lower wage based on  specific conditions. Some of the common instances are:

  • Standard Minimum Wage, Arizona: Currently, the standard minimum wage in the state is set to $12.15 per hour. Employers who are subject to the Fair Wages and Healthy Families Act should pay this amount for subsequent hours worked irrespective of the frequency of the agreed payment. The minimum wage laws in Arizona have some exemptions as well. These are:
  • Workers who are employed by the federal or local government
  • Workers who are employed by the siblings or parents
  • Workers who are employed by startups or small businesses making less than $500,000 as annual revenue
  • Babysitters working on a casual basis
  • Student Minimum Wage, Arizona: As per Federal law, young workers who are below 20 years of age will be paid a minimum wage of $4.25 per hour during the first 90 workdays. The Department of Labour in the United States ensures that full-time students are paid around 85 per cent of the federal minimum wage. 

Moreover, students who are above 16 years of age and enrolled in some type of vocational education receive around 75 percent of the federal minimum wage. However, Arizona does not make any distinction between minors and adults in the law related to the minimum wage. Therefore, any individual in Arizona in the above-mentioned conditions can earn around $12.15 per hour.

  • Tipped Minimum Wage, Arizona: As per the Fair Wages and Healthy Families Act, workers receiving tips or gratuities can be paid a maximum of $3 less than the minimum wage of the state for every hour worked. However, this stands true only when the employer proves the same by adding the tips received to the respective wages paid every week. 

How will Minimum Wage in Arizona Change in the Coming Future?

As per the 2016 proposition, Arizona increased its minimum wage to $12 in 2020. Then, it increased to $12.15 in 2021 and eventually to $12.80 in 2022. The minimum wage in Arizona in 2023 and even beyond that will get adjusted on the basis of the cost of living and inflation. 

Will Arizona reach the $15 minimum wage in the coming times? In some parts of the Grand Canyon State, it is getting closer. Flagstaff has come up with its own legislation that will observe the minimum wage to reach $15.50 by the time of 2022. This remains in line with the number of cities in the country having passed the legislation to achieve the minimum wage of $15. Beyond this, the minimum wage in Arizona will increase on the basis of inflation. 

How can Business Owners in Arizona Prepare for the Minimum Wage Increase?

As the minimum wage in the state is all set to rise over the coming years, it is time for business owners to prepare themselves. 

  • Understanding the Stuff: Businesses should ensure that they are doing ample research while being up to date with the expected changes with respect to minimum wages in Arizona. If a business is unsure of which wage regulations apply to the particular industry, it can contact the Chamber of Commerce or other business liaisons. 
  • Analyzing the Budget: It is important to check the cash flow and budget properly. It is also crucial to create a dedicated hiring plan that can be afforded. Businesses can consider hiring different types of workers. For instance, they can hire seasonal workers during the summer or winter months. It helps in supplementing the existing staff during challenging times rather than hiring full-time employees. 
  • Making Smart Hiring Decisions: It is important to ensure that businesses are hiring the right individuals. The cost of employee replacement is quite high –both in terms of money and time. It will help save in the long run when businesses take time in hiring as well as training the employees. 
  • Updating the Technology: As businesses make operations more efficient, it helps in saving time and money in the long run. Therefore, it is imperative to know about ways in which technology can help in reducing the existing costs. 

Conclusion 

Employees and employers should know about their rights under the local and federal governments. Learning about the minimum wage status in Arizona can help the residents of the state in defending themselves from damaging labour practices.

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