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Arizona minimum wage increasing

When you’re budgeting for 2022 don’t forget the Arizona minimum wage is going up. Starting on January 1, 2022, the minimum hourly wage for the state will be $12.80.

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The pay bump is part of Proposition 206, passed in 2016. Prop 206 raised the minimum wage from $8.05 to $10 an hour and then raised it again in 2020 to $12 an hour. Going forward, Prop 206 set adjustments annually to reflect inflation. The increase from $12 to $12.80 is in response to a Consumer Price Index rise of 5.3%.

This increase is unlikely to affect a lot of employers given the current state of the labor market. Many companies have increased pay to well over $12.80 an hour in the hopes of attracting new employees.

Persons employed by a parent or sibling, casual babysitting, and those employed by the State of Arizona or the federal government are also exempt from minimum wage laws. There is no distinction between full and part time employees so hours worked doesn’t exempt an employee from the minimum wage laws, but the law does not apply to independent contractors or volunteers.

There is an exclusion from the minimum wage law. Small businesses that the state of Arizona defines as a corporation, proprietorship, partnership, joint venture, limited liability company, trust, or association that has less than $500,000 in gross annual revenue are exempt IF the business is already exempt from paying the federal minimum wage under section 206(a) of title 29 of the United States Code.

Additional information is available at Industrial Commission of Arizona website.

If you have any questions about wage and hour law and recording, please contact your Henry+Horne advisor.

Beth Hawley