AZ minimum wage law, DOL overtime rules update

Your Guide to State, Local, Federal, Estate + International Taxation

minimum wage, Arizona, overtime, Department of LaborAfter several months of waiting, Arizona business owners finally have their answer on whether Prop. 206, which raises the minimum wage, will stand; meanwhile, we’re also closer to knowing what will happen with the new overtime rules that were delayed late last year.

AZ minimum wage law

Arizona’s minimum wage law will stand after the Arizona Supreme Court rejected a challenge from several business groups late Tuesday. The court unanimously rejected arguments from business groups led by the Arizona Chamber of Commerce and Industry that the voter-approved law was unconstitutional.

Prop. 206 raised the minimum wage in Arizona to $10 on January 1 of this year and it will continue to increase incrementally to $12 an hour by 2020. After that, minimum wage in the state will go up every January 1 based on the cost of living. The law also requires employers to start accruing paid sick leave for employees starting July 1, 2017.

Now, businesses will have to start moving forward to work out recordkeeping systems for these new requirements as well as how to deal with them financially.

Overtime rules

An appeals court recently granted President Trump’s Department of Labor (DOL) until May 1 to take a position on the overtime rules. The delay will allow the new labor secretary time to weigh in after his confirmation hearing on March 22.

The rules would essentially double the existing threshold for overtime pay to $47,476 a year and make more than 4 million workers eligible for overtime who didn’t qualify before. They were set to take effect in December. State and business groups challenged the rules and a federal district court judge temporarily halted them. President Obama’s DOL started to appeal the order, but the Trump administration hasn’t decided how to proceed.

We will keep you updated as we follow this issue.

Jeremy Smith, CPA