Labor and Employment Law Overview: Arizona

Labor and Employment Law Overview requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: XpertHR Editorial Team

Summary

  • Arizona law prohibits an employer from discriminating and retaliating against employees in a variety of protected classes. Employers must also provide equal pay and protect whistleblowers. See EEO, Diversity and Employee Relations.
  • Arizona requires the use of E-Verify and permits preemployment credit checks and drug testing. See Recruiting and Hiring.
  • In Arizona, there are requirements related to the minimum wage and child labor. See Wage and Hour.
  • Arizona has laws that relate to employee pay, including payment of wages, pay frequency, wage deductions and pay statements. See Pay and Benefits.
  • Under Arizona law, employees are entitled to certain leaves or time off, including paid sick leave, crime victim leave, voting leave, jury duty leave and military leave. See Time Off and Leaves of Absence.
  • Arizona prohibits smoking in the workplace and allows weapons in parking lots. See Health and Safety.
  • When employment ends, Arizona employers must comply with applicable final pay and job reference requirements. See Organizational Exit.

Introduction to Employment Law in Arizona

Arizona has some laws that provide greater protections to employees than federal law, including a higher minimum wage and paid sick leave, but generally follows federal law with respect to topics such as overtime pay, health care continuation coverage, jury duty leave and occupational safety and health.

Select Arizona employment requirements are summarized below to help an employer understand the range of employment laws affecting the employer-employee relationship in the state. An employer must comply with both federal and state law.

An employer must also comply with applicable municipal law obligations affecting the employment relationship, in addition to complying with state and federal requirements.

EEO, Diversity and Employee Relations

Key Arizona requirements impacting EEO, diversity and employee relations are:

Fair Employment Practices

The Arizona Civil Rights Act (ACRA) provides protections similar to those provided under federal law. The ACRA covers employers with 15 or more employees and prohibits employment discrimination based on protected characteristics including:

  • Race;
  • Color;
  • Religion;
  • Sex (including pregnancy and maternity);
  • Age (40 and over);
  • National origin;
  • Disability; and
  • Genetic test results.

With respect to sexual harassment claims, the ACRA covers employers with at least one employee.

The ACRA also prohibits an employer from taking an adverse employment action against employees who make formal complaints, testify or assist/participate in any investigation or hearing into an employer's unlawful discrimination.

Equal Pay

The Arizona Equal Pay Law prohibits an employer from paying any employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for the same quantity and quality of the same classification of work. The law does not, however, prevent an employer from basing pay differences on seniority, length of service, skill, differences in skill or hours of work, lifting restrictions or other reasonable factors other than sex.

Whistleblower Protections

The Employment Protection Act protects whistleblowers who:

  • Have disclosed an employer's violations of the law in a reasonable manner;
  • Have information or a reasonable belief about an ongoing, past or future violation of Arizona law by the employer or a fellow employee; and
  • Made the disclosure either to the employer, an employee reasonably believed to be in a managerial position or an employee of any public agency or political subdivision.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on EEO, diversity and employee relations practices in Arizona can be found in the Arizona Employee Handbook Table of Contents, EEO - Discrimination: Arizona, EEO - Harassment: Arizona, EEO - Retaliation: Arizona, Disabilities (ADA): Arizona, Employee Discipline: Arizona, Arizona Workplace Labor and Employment Law Posters and Does This Law Apply to My Organization in Arizona? Federal requirements can be found in Disabilities (ADA): Federal, EEO - Discrimination: Federal, EEO - Harassment: Federal, EEO - Retaliation: Federal and Employee Discipline: Federal.

Recruiting and Hiring

Key Arizona requirements impacting recruiting and hiring are:

Credit Checks

Similar to federal law, Arizona law requires an applicant's written consent in order for an employer to obtain the applicant's credit report for use in making hiring decisions. If the employer makes an unfavorable decision after reviewing the job applicant's credit report, it must disclose to the applicant the name and address of the credit reporting agency that prepared the report.

Drug Testing

An Arizona employer may test job applicants for drug and alcohol use when testing has a job-related purpose consistent with business necessity. The employer must have a written policy that is distributed to all prospective employees. The employer may refuse to hire a prospective employee who fails a test or refuses to submit to drug or alcohol testing. The employer is not required to pay for preemployment drug tests.

E-Verify

The Legal Arizona Workers Act (LAWA) prohibits an employer from employing undocumented workers. This prohibition also applies to employers using an independent contractor or subcontractor to obtain labor.

LAWA requires an employer to:

  • Register to use E-Verify;
  • Use E-Verify to verify the status of employees hired after December 31, 2007; and
  • Keep records of the verification for the duration of the individual's employment or three years, whichever is longer.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on recruiting and hiring practices in Arizona can be found in the Arizona Employee Handbook Table of Contents, Preemployment Screening and Testing: Arizona, Immigration, Form I-9 and Work Visas: Arizona and Does This Law Apply to My Organization in Arizona? Federal requirements can be found in Preemployment Screening and Testing: Federal and Immigration, Form I-9 and Work Visas: Federal.

Wage and Hour

Key Arizona requirements impacting wages and hours are:

Minimum Wage

Under the Arizona Minimum Wage Act, every covered employer is required to pay employees at least $10.50 per hour. There are exemptions, and a separate minimum wage rate exists for certain employees (e.g., tipped employees).

Child Labor

Child labor laws in Arizona restrict the occupations in which minors may be employed and the number of hours and times during which they may work.

Arizona law prohibits an employer from employing minors in occupations found to be hazardous or detrimental to the well-being of minors unless a variance is granted. Some identified occupations are prohibited for all minors, but others are prohibited only for minors under the age of 16.

With some exceptions, minors under the age of 16 may not work:

  • More than 40 hours in one week when: 1) the employee is not enrolled in school; or 2) school is not in session;
  • More than 18 hours in one week when the employee is enrolled in school and school is in session;
  • More than eight hours in one day when: 1) the employee is not enrolled in school; or 2) on a day when school is not in session, i.e., weekend or break;
  • More than three hours in a school day when the employee is enrolled in school;
  • Between 9:30 p.m. and 6:00 a.m. when school is in session;
  • Between 7:00 p.m. and 11:00 p.m. when school is not in session.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on wage and hour practices in Arizona can be found in Minimum Wage: Arizona, Child Labor: Arizona, Arizona Workplace Labor and Employment Law Posters and Does This Law Apply to My Organization in Arizona? Federal requirements can be found in Minimum Wage: Federal and Child Labor: Federal.

Pay and Benefits

Key Arizona requirements impacting pay and benefits are:

Payment of Wages

Employees may be paid wages in the form of cash, check, draft or money order. All payments must be made in US currency. An employer may pay via direct deposit or electronic paycard under certain circumstances.

Pay Frequency

Employees must be paid at least twice a month on regular paydays occurring no more than 16 days apart. If an employer's principal location and its payroll systems are centralized outside of Arizona, the employer may pay exempt employees on a monthly basis.

Wage Deductions

An employer may withhold an employee's wages under the following circumstances:

  • If required by state or federal law;
  • With the employee's prior written authorization; or
  • Where the wage amount is under dispute.

Pay Statements

An employer must provide paper or electronic pay statements to employees who are paid by direct deposit or paycard.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on pay and benefits practices in Arizona can be found in Payment of Wages: Arizona and Does This Law Apply to My Organization in Arizona? Federal requirements can be found in Payment of Wages: Federal.

Time Off and Leaves of Absence

Key Arizona requirements impacting time off and leaves of absence are:

The Fair Wages and Healthy Families Act (FWHFA) allows eligible employees to take paid sick leave for the following reasons:

  • The employee's or a family member's illness, injury or health condition; need to seek medical diagnosis, care or treatment; or need for preventive care;
  • Closure of the employee's workplace or a child's school or place of care due to a public health emergency;
  • The employee's or a family member's presence in the community may jeopardize the health of others due to exposure or suspected exposure to a communicable disease; and
  • Absences due to domestic violence, sexual violence, abuse or stalking of an employee or a family member.

An employer with 15 or more employees must provide up to 40 hours of paid sick time per year. Smaller employers must provide up to 24 hours per year.

Other Time Off Requirements Affecting Arizona Employers

In addition to the FWHFA, an Arizona employer is also required to comply with other leave and time off laws, such as:

  • Crime victim leave (covering employers with 50 or more employees);
  • Voting leave;
  • Jury duty leave; and
  • Military leave.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on time off and leave of absence practices in Arizona can be found in the Arizona Employee Handbook Table of Contents, Other Leaves: Arizona, Jury Duty: Arizona, USERRA: Arizona, Arizona Workplace Labor and Employment Law Posters and Does This Law Apply to My Organization in Arizona? Federal requirements can be found in Other Leaves: Federal, Jury Duty: Federal and USERRA: Federal.

Health and Safety

Key Arizona requirements impacting health and safety are:

Smoke-Free Workplace

The Smoke-Free Arizona Act prohibits smoking in all public places and places of employment. An Arizona employer must post no-smoking signs at all entrances to buildings.

Weapons in the Workplace

An Arizona employer generally may not prohibit employees or other individuals from lawfully transporting or storing firearms in the person's locked, personal vehicle or a locked compartment in the person's private motorcycle. The firearm may not be visible from the outside of the vehicle or motorcycle.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on health and safety practices in Arizona can be found in the Arizona Employee Handbook Table of Contents, Employee Health: Arizona, Workplace Security: Arizona, Arizona Workplace Labor and Employment Law Posters and Does This Law Apply to My Organization in Arizona? Federal requirements can be found in Employee Health: Federal and Workplace Security: Federal.

Organizational Exit

Key Arizona requirements impacting organizational exit are:

Final Pay

Employees who quit their job generally must be paid by the next regular payday. Employees who are fired must be paid within seven business days or by the next regular payday, whichever is earlier.

An employer does not have to pay a separated employee for the value of accrued vacation time or sick leave unless the employer has a policy requiring such payments.

References

Arizona employers enjoy qualified immunity for communications regarding job references. An employer that acts in good faith cannot be sued for:

  • Providing information to employers requesting information about an employee's training, experience, qualifications or job performance. An employer that provides such information in writing must send a copy to the employee's last known address;
  • Telling a prospective employer why a former employee was terminated; and
  • Providing other information about the job performance, professional conduct or evaluation of an employee.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on organizational exit practices in Arizona can be found in Payment of Wages: Arizona, Employee Communications: Arizona and Does This Law Apply to My Organization in Arizona? Federal requirements can be found in Payment of Wages: Federal and Employee Communications: Federal.