Arizona Employment Law — full calculator

Frequently Asked Questions

• What are Arizona's overtime rules compared to federal FLSA?

  Arizona follows the federal FLSA overtime standard: employers must pay 1.5× the regular rate for all hours worked over 40 in a workweek. Unlike California, Arizona has no daily overtime threshold (no extra pay for working over 8 hours in a single day). FLSA governs overtime for Arizona private-sector workers.

• When must Arizona employers issue a final paycheck after termination?

  Under ARS 23-353, a discharged (fired or laid-off) employee must receive their final wages within seven working days or by the end of the next regular pay period — whichever is sooner. Employees who resign voluntarily must be paid by the next regular payday (ARS 23-351). Federal FLSA sets no final-paycheck deadline, making Arizona's rules strictly additive.

• What penalty applies if an Arizona employer pays a final paycheck late?

  Violating ARS 23-353 is a petty offense (criminal classification). The Industrial Commission of Arizona (ICA) can also order the employer to pay triple the amount of unpaid wages once the ICA's Determination becomes final and the employer fails to comply within 10 days.

• Does Arizona require paid sick leave?

  Yes. Arizona's Fair Wages and Healthy Families Act (Proposition 206, ARS 23-372) requires all employers to provide paid sick time. Employees accrue 1 hour of sick leave per 30 hours worked. Employers with 15 or more employees must allow accrual up to 40 hours per year; smaller employers cap accrual at 24 hours per year.

• Can unused sick leave be carried over to the next year in Arizona?

  Yes. Under ARS 23-372, unused earned sick time carries over to the following year, subject to the annual accrual caps (40 hours for 15+ employee employers; 24 hours for smaller employers). Employers may instead pay out unused sick time at year-end and front-load the full accrual amount at the beginning of the next year.

• What is Arizona's minimum wage in 2026?

  Arizona's minimum wage is $15.15 per hour effective January 1, 2026, under ARS 23-363 (Proposition 206). The rate is indexed to the Consumer Price Index (CPI) and announced each October by the ICA. This exceeds the federal FLSA floor of $7.25/hr by over 100%.

• What is the minimum wage for tipped workers in Arizona?

  Arizona employers may pay tipped employees a direct wage of $12.15/hr — a maximum $3.00 tip credit below the $15.15/hr minimum. Tips must bring total hourly earnings to at least $15.15/hr. If tips fall short in any workweek, the employer must make up the difference. Flagstaff sets a higher local rate of $18.35/hr with no tip credit permitted.

• Are non-compete agreements enforceable in Arizona?

  Arizona evaluates non-compete agreements under the common-law reasonableness standard — courts examine geographic scope, duration, and whether the restriction is necessary to protect a legitimate business interest. Arizona does not have a broad ban like California. ARS 23-494 separately prohibits non-compete clauses for broadcast employees.

• Does Arizona require employers to provide meal or rest breaks?

  No. Arizona does not have a state statute mandating meal or rest breaks for adult private-sector employees. Employers follow federal FLSA guidance: breaks under 20 minutes must be paid; bona fide meal periods of 30+ minutes (where the employee is fully relieved of duties) need not be paid. Some industries or collective bargaining agreements may have additional requirements.

• How is Arizona's minimum wage updated each year?

  Proposition 206 (ARS 23-363) requires the ICA to calculate the new annual rate each October using the prior year's CPI increase. The new rate takes effect automatically on January 1 without legislative action. The rate can only increase or remain flat — it cannot decrease even in deflationary periods.