The Arizona minimum wage will increase yet again from $12.80 per hour to $13.85 per hour. The increase is more than $1.00 per hour and it will take effect on January 1, 2023 and will remain in effect until December 31, 2023. This means that Arizona employers will need to start paying the higher minimum wage ($13.85 per hour) for all hours worked after January 1, 2023. If employees are classified as tipped employees, their minimum wage is also increasing to $10.85 per hour.

The Arizona minimum wage will likely increase yet again on January 1, 2024 because the Fair Wages and Healthy Families Act provides for a cost-of-living increase on January 1 of each year.

It is important to note that twenty-seven states are increasing their minimum wage in 2023.   Federal minimum wage remains unchanged at $7.25 per hour and is much lower than the Arizona minimum wage. Arizona employers must pay the higher of the federal or state mandated minimum wage, which means Arizona employers must pay the higher Arizona minimum wage. Some Arizona cities, such as Flagstaff and Tucson, have an even higher minimum wage than the Arizona minimum wage is. Employers in those cities must pay the higher minimum wage.

Arizona employers must also post the Arizona minimum wage poster in a conspicuous place. If the work force includes Spanish speaking employees, then the employer should post the poster in both English and Spanish.  With many employees working hybrid or fully remote schedules, employers should include a link to the poster with their employees’ paychecks or through an employee intranet or portal. The poster is available at no cost.  An employer can face fines and penalties if they fail to post it in a conspicuous place or make it reasonably available to remote employees.

The failure to comply with wage laws can be very costly for employers. Depending on the type of wages not paid, the employee can recover two or three times the amount they should have been paid. Employees can also recover an award of attorney fees, which often exceeds the amount of unpaid or under-paid wages.