How much do you know about the laws and rules that govern Arizona wages? Read our 12 questions and answers about Arizona wages employers (and employees) should know.
Q1: Where do wage and hour laws come from?
Federal and state laws regulate Arizona wages and work hours.
The federal wage and hour law is called the Fair Labor Standards Act (FLSA). Most states also have their own wage and hour laws. Some local governments (like cities and counties) have them as well.
An employer has to follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in states that have set a higher minimum wage must pay the higher amount.
Q2: Does Arizona have minimum wage or overtime laws?
Arizona has a minimum wage law but not one that addresses overtime. Any Arizona company that has to follow the FLSA (there are some exceptions) must follow federal overtime laws apply. This means employees must be paid 1.5 times their usual wage for overtime hours.
Q. 3: Is the minimum wage different in Arizona for tipped employees?
The FLSA allows employers to pay a lower hourly minimum wage when that wage plus the tips an employee earns adds up to at least the full minimum wage for each hour worked. Otherwise, the employer has to make up the difference.
Employers must pay at least $5.05 per hour—$3 under the minimum wage—to ensure an employee’s tips bring the total hourly wage up to the state minimum wage of $8.05/hour.
Q. 4: Are employees entitled to a lunch or rest break?
No. Arizona does not require employers to provide lunch or rest breaks.
However, employees are entitled to be paid when they work during a break (for example, covering the phones while eating lunch). And, generally, employees are entitled to be paid for any short breaks (five to 20 minutes) an employer provides. This time is considered part of the work day.
Q. 5: What if an employee thinks an employer is not paying wages in accordance with Arizona laws?
The employee can file a written complaint with the Arizona Department of Labor.
Q. 6: Are small businesses exempt from FLSA wage and hour laws?
No. Unlike most other state and federal employment laws, the FLSA does not depend directly upon the number of employees.
The FLSA covers individual employees whose work affects interstate commerce. It also applies to employees who work for an employer covered as an enterprise that is involved in interstate commerce.
In a very real sense, just about anything in our modern, networked economy is considered interstate commerce. The vast majority of businesses can save themselves a lot of time and legal expenses by going ahead and assuming they and all their employees are covered under the FLSA.
Q. 7: Are salaried employees exempt from overtime?
No. Big No!
In fact, many employers make the mistake of assuming that simply because an employee is paid a salary, or has a high-ranking job title, the employee is exempt from overtime pay.
Many non-exempt employees (receptionists, secretaries, file clerks) are paid a salary. Giving an employee a high-sounding job title will make no difference if the employee’s job duties do not satisfy the criteria for exemption from the law. The law focuses on the nature of the job to determine if it is exempt from FLSA wage and hour laws.
Q. 8: How would a Department of Labor (DoL) investigation determine exemption?
A DoL investigation to determine exempt positions will usually:
- Examine records to determine which laws or exemptions apply
- Review payroll and time records
- Interview certain employees
When all the fact-finding steps have been completed, the investigator will ask to meet with the employer and/or a representative of the firm who has authority to reach decisions and commit the employer to corrective actions if violations have been found.
Q. 9: What happens if an employer has violated Arizona wage and hour law?
DoL will tell the employer it must comply with Arizona wage and hour law. It will explain what violations have occurred and, if so, what they are and how to correct them, such as if they need to pay back wages owed to employees for minimum wage or overtime violations.
If the employer refuses to follow Arizona wage and hour laws, the DoL will refer the matter to the appropriate prosecuting authorities. Employers have ten days to respond to a notice about upcoming prosecution. If employers fail to respond to two notices, the Department will make a determination based on the evidence in the file.
Q. 10: What are the possible results of DoL wage claim investigations?
The Department may issue a determination in favor of one party or another, depending on the evidence in the case. In some cases, if the evidence is not conclusive or if the Department lacks the jurisdiction in a particular matter, a determination cannot be made.
Q. 11: What happens if either party disagrees with the Department’s determination?
The Department’s decision can be appealed to the state Superior Court.
Q. 12: What happens if a business refuses to pay damages ordered by Superior Court?
Employers who refuse to pay damages arising from a DoL investigation can be sued in Superior Court, where the Department can request a judgement against the employer. These judgements are usually three times the amount initially owed to employees and recorded with the County Recorder’s Office. Usually, the claimants/employees will hire an attorney to collect the damages for them.
If you have any questions about wage and hour issues, please contact my office for a consultation.