While 2024 witnessed a number of labor law updates, 2025 hasn’t been as active for Arizona federal and state agencies. So far, however, this year did see some key changes that can affect labor law in Arizona. Let’s find out what’s in store.
Arizona Minimum Wage Increase
On January 1, 2025, the AZ minimum wage increased by 35 cents, i.e., it went from $14.35 to $14.70 per hour. This equates to a 2.4% raise.
Why the rise? This step was taken in accordance with the continued wage increase initiative enacted by The Fair Wages and Healthy Families Act. This act requires the minimum wage in Arizona 2025 to increase based on the cost of living.
Additionally, many municipalities have independent minimum wage requirements effective January 1, 2025. Employers need to be aware of these requirements.
- The minimum wage in Flagstaff rise to $17.85 per hour
- Tucson increased its minimum wage to $15.00 per hour
In some cases, certain employees and employers may be exempt from Arizona’s minimum wage requirements. This includes:
- Tipped employees may receive a base wage of up to $3.00 per hour less than the minimum wage. However, the total of the base wage plus tips should equal the minimum wage.
- Individuals who work for their parents or siblings in a family-owned business are exempt.
- While babysitters are exempt from the minimum wage requirements, full-time nannies are not.
- Small businesses making $500,000 or less annually may be exempt if they are exempt from paying a minimum wage under section 206(a) of Title 29 of the United States Code.
- State and federal government employees are exempt.
- In some cases, disabled workers, farm workers, and employees under the age of 20 may be exempt.
Remember, as an employer, it is your duty to display updated labor law posters at your workplace.
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