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AZ Minimum Wage Increase – January 1, 2020

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Arizona’s minimum wage is set to increase to $12.00 on January 1, 2020.

The $1.00 increase is the largest jump under the schedule listed in A.R.S. § 23-363 pursuant to Proposition 206. On November 8, 2016, Arizona voters approved Proposition 206, referred to as the Fair Wages and Healthy Families Act (the “Act”).  The Act initially raised Arizona’s minimum wage requirement to $10.00 per hour effective January 1, 2017, and thereafter increased the minimum wage by $0.50 to $10.50 effective January 1, 2018, and $11.00 effective January 1, 2019. Beginning January 1, 2021, the Arizona minimum wage is set to rise in accordance with the increase in cost of living, as determined by the consumer price index published by the U.S. Department of Labor. The Act requires employers to provide earned paid sick time benefits to all Arizona employees, effective July 1, 2017.

Importantly, the Act does not prevent Arizona counties, cities, or towns from implementing by ordinance a higher minimum wage within their respective geographic boundaries. Indeed, on November 8, 2016, Flagstaff voters approved Proposition 414 setting a new minimum wage schedule for the city, effective July 1, 2017. On January 1, 2020, Flagstaff’s minimum wage will increase to $13.00 per hour – $1.00 higher than the state minimum wage. Notably, on January 1, 2021, Flagstaff’s minimum wage will increase to $15.00 per hour or $2.00 above the state minimum wage, whichever is greater.

Employers should consider reviewing internal policies in preparation for the jump. In addition, employers should also consider contacting notice vendors to make sure they are compliant with the latest posting requirements ahead of the increase.