Arizona Senate Research Staff, 1700 W. Washington Street, Phoenix, AZ 85007
LABOR EMPLOYMENT LAWS
INTRODUCTION
Employment in Arizona is regulated by both federal and state
law. Some issues, such as union membership and minimum wage, are
regulated by federal and state laws, whereas other issues are
addressed only by federal law or state law, but not both. In other
instances, such as employment discrimination, Arizona has
essentially codified federal law which provides the Arizona Attorney
General (AG) with the power of enforcement.
RIGHT-TO-WORK
Arizona is one of 28 states with “right-to-work” laws. The Arizona
Constitution and state statute states, “No person shall be denied the
opportunity to obtain or retain employment because of non-membership
in a labor organization, nor shall the State or any subdivision thereof, or
any corporation, individual or association of any kind enter into any
agreement, written or oral, which excludes any person from employment
or continuation of employment because of non-membership in a labor
organization.” This provision, effective since 1946, prohibits
conditioning employment on union membership and prohibits unions
from requiring employers to hire only union employees.
1
The National Labor Relations Act (NLRA) defines the right of
most private sector employees, with specific exceptions, to organize
and to collectively bargain with their employers through
representatives of their own choosing, or not to do so. According to
the National Labor Relations Board, which enforces the NLRA, the
act allows a union and an employer to make a union-security
agreement under certain conditions. A union-security agreement
requires employees to make certain payments to the union as a
condition of retaining employment, but the agreement cannot require
employees to be union members. Under a union-security agreement,
individuals choosing not to be members may be required to pay full
initiation fees and dues that unions may expend only on activities
related to collective bargaining, contract administration and grievance
adjustment.
Note to Reader:
The Senate Research Staff
provides nonpartisan, objective
legislative research, policy
analysis and related assistance
to the members of the Arizona
State Senate. The Issue Briefs
series is intended to introduce a
reader to various legislatively
related issues and provide
useful resources to assist the
reader in learning more on a
given topic. Because of
frequent legislative and
executive activity, topics may
undergo frequent changes.
Nothing in the Brief should be
used to draw conclusions on
the legality of an issue.
Arizona State Senate
Issue Brief
November 10, 2022
1
Arizona Const. art. 25; A.R.S.§ 23-1302
Arizona Senate Research Staff, 1700 W. Washington Street, Phoenix, AZ 85007
In right-to-work states, unions may not ask
employers to, and employers cannot agree to, enter
into union-security agreements. Employees cannot
be required to either join the union or pay the
equivalent dues in order to remain employed.
Employees who want to join can do so with all
the privileges of membership, such as
participation in contract negotiations, ratification
of the contract, voting on a decision to strike and
voting for leadership. Nonmembers are generally
denied those privileges, but are accorded any
contractual benefits. In addition, the union has a
duty to represent all employees fairly without
regard to their membership status.
2
DISCRIMINATION IN EMPLOYMENT
Civil Rights Act of 1964
Title VII of the federal Civil Rights Act
(CRA) protects individuals from discrimination
on the basis of race, color, national origin, sex
and religion in regard to any term, condition or
privilege of employment. It prohibits not only
intentional discrimination, but also job policies
that disproportionately affect certain groups of
persons that are not related to the job and the
needs of the business. The CRA applies to
employers with 15 or more employees and is
enforced on the federal level by the U.S. Equal
Employment Opportunity Commission (EEOC).
3
Americans with Disabilities Act of 1990
Title I of the federal Americans with
Disabilities Act (ADA) prohibits private and
public employers from discriminating against
qualified individuals with disabilities in regard to
any term, condition or privilege of employment.
Like the CRA, it covers employers with 15 or more
employees and is enforced by the EEOC. An
employee is considered to have a disability if they:
1) have a physical or mental impairment that
substantially limits one or more major life
activities; 2) have a record of such impairment;
Labor Employment Laws 2
or 3) are regarded as having such an impairment.
“Major life activities” include caring for oneself,
walking, seeing, hearing, speaking, learning and
the operation of a major bodily function. A
qualified employee or applicant with a disability
is an individual who, despite having a disability,
can perform the essential functions of the
particular job, either with or without a reasonable
accommodation. Reasonable accommodation
may include: 1) making existing facilities readily
accessible to and usable by persons with
disabilities; 2) job restructuring; 3) modifying
work schedules; 4) acquiring or modifying
equipment; 5) adjusting examinations, training
materials or policies; and 6) providing qualified
readers or interpreters. An employer must make
an accommodation if it would not impose undue
hardship on the employer’s business.
4
Arizona’s Civil Rights Laws
Arizona’s civil rights statutes codify the CRA
and ADA, allowing the AG to enforce both laws.
Statute prohibits an employer from failing or
refusing to hire, discharging or from otherwise
discriminating against an individual with respect
to the individual’s compensation or terms,
condition or privileges of employment because of
the individual’s race, color, religion, sex, age,
disability or national origin. It also prohibits an
employer from limiting, segregating or
classifying employees or prospective employees
in any way that deprives any individual from
employment opportunities or otherwise adversely
affects the individual’s status as an employee
because of the individual’s race, color, religion,
sex, age, disability or national origin.
5
AT-WILL EMPLOYMENT
Historically, employment for an indefinite
period of time has been considered at-will
employment that can be terminated by either the
employer or the employee at any time with or
without cause or notice. Arizona’s Employment
2
29 U.S.C. §§ 151-169
3
42 U.S.C. §§ 2000e-2000e-17
4
42 U.S.C. §§ 12101-12213; 29 C.F.R. § 1630.2
5
A.R.S. Title 41, Ch. 9
Arizona Senate Research Staff, 1700 W. Washington Street, Phoenix, AZ 85007
Protection Act of 1996 (Act) codifies the at-will
doctrine by establishing that the employment
relationship is contractual in nature and severable
at the pleasure of either the employee or the
employer, unless the employment relationship is
varied by a written contract that is: 1) signed by
the employer and employee; 2) set forth in an
employment handbook or similar document
distributed to employees; or 3) set forth in a
writing signed by the party to be charged (usually
the employer).
The Act also limits employees’ claims for
wrongful termination. Under the Act, an
employee has a claim only under the following
circumstances:
• the employer breaches an employment
contract;
• the termination violates public policy;
• the termination is in retaliation for any 10
specified employee rights; or
• in the case of public employees, the
employee has the right to continue
employment based on federal, state or local
law or regulation.
An employee must bring a claim for
wrongful termination within one year after the
cause of action accrues. In an action for wrongful
termination based on breach of contract or a
violation of public policy, the Act limits the
remedies the employee may pursue to those
established for breach of contract or by the
statute that underlies the public policy. If a
remedy is not established for the specific statute,
the employee may seek tort damages.
6
FEDERAL WAGE AND HOUR LAWS
Fair Labor Standards Act
The federal Fair Labor Standards Act (FLSA)
establishes minimum wage, overtime pay, record
keeping and child labor standards that apply to
full-time and part-time workers in the private and
public sectors. Employees may be classified as
Labor Employment Laws 3
covered, nonexempt employees under the FLSA
based on their employer's volume of sales or
business or the type of activities engaged in by
the employer or employee. The U.S. Department
of Labor (DOL) administers and enforces the
FLSA through the Wage and Hour Division of
the Employment Standards Administration.
7
Minimum Wage
In May 2007, President George W. Bush
signed legislation increasing the federal
minimum wage, the first increase since 1997,
from $5.15/hour to $7.25/hour in three phases as
follows: 1) beginning July 24, 2007, $5.85/hour;
2) beginning July 24, 2008, $6.55/hour; and 3)
beginning July 24, 2009, $7.25/hour.
8
Where
state law requires a higher minimum wage, the
higher standard applies.
Overtime
The FLSA requires nonexempt employees to
receive overtime pay at time and one-half of the
regular rate of pay for all hours worked over 40
hours in a workweek.
9
Under the DOL
regulations, workers paid less than $35,568
annually, or $684 a week, are automatically
guaranteed overtime protection, regardless of title
or duty.
10
Overtime and Minimum Wage Exemptions
The FLSA provides several exemptions from
both minimum wage and overtime pay, including
for employees employed as executive,
administrative, professional and outside sales
employees, in addition to certain computer
professionals. To qualify for the exemption,
employees generally must meet certain criteria
regarding their job duties and be paid on a salary
basis of at least $684 a week, or on an hourly
basis of at least $27.63 an hour for specified
6
A.R.S. §§ 12-541, 23-1501 and 23-1502
7
29 U.S.C. §§ 201-219;
DOL: Wages and the Fair Labor Standards Act
8
DOL: Minimum Wage
9
DOL: Overtime Pay
10
29 C.F.R. 541
Arizona Senate Research Staff, 1700 W. Washington Street, Phoenix, AZ 85007
computer professionals. Job title alone does not
determine exempt status.
11
The FLSA establishes a subminimum wage
of $4.25 an hour for employees under 20 years of
age during the first 90 consecutive calendar days
after initial employment with an employer. It also
requires the U.S. Secretary of Labor to grant
employers special certificates allowing wage
rates below the minimum wage for certain
individuals, including learners, full-time students
employed by certain establishments and
individuals whose productive capacity is
impaired by a physical or mental disability,
including those related to age or injury. For each
submission wage category, FLSA and DOL
regulations prescribe the subminimum wage and
conditions for issuing a special certificate. A
subminimum wage for a worker with a disability
must be commensurate, based on the worker's
individual productivity, to the wage paid to a
worker without a disability for essentially the
same type, quality and quantity of work.
12
The FLSA sets the employer’s direct wage
obligation to tipped employees, those who
customarily and regularly receive more than $30 a
month in tips, at not less than $2.13/hour.
However, if an employee’s tips combined with the
employer’s direct wage of $2.13/hour do not equal
the minimum hourly wage, the employer must
make up the difference. Arizona law establishes a
higher minimum wage for tipped employees.
13
ARIZONA’S WAGE AND HOUR LAWS
Minimum Wage and Sick Time
Until 2007, Arizona did not have a state
minimum wage and statute prohibited political
subdivisions from requiring a minimum wage
higher than the federal minimum wage. In
November 2006, Arizona voters approved a voter
initiative, effective January 1, 2007, that
Labor Employment Laws 4
established a mandatory state minimum wage of
$6.75/hour and required the Industrial
Commission of Arizona (ICA) to annually
increase the minimum wage by the cost of living.
The proposition also specified that the Legislature
could increase the minimum wage and granted
counties, cities and towns the authority to regulate
minimum wages, except for setting a minimum
wage lower than the state minimum. Employers
may pay employees who customarily and
regularly receive tips up to $3.00/hour less than
the minimum wage if, when tips received are
added to wages paid for each week, the employee
receives not less than the minimum wage for all
hours worked.
14
In November 2016, Arizona voters approved
Proposition 206, the Fair Wages and Healthy
Families Act (Act), increasing the state’s hourly
minimum wage in four stages from $10.00 in
2017, to $12.00 by 2020, and then by the cost of
living each subsequent year. In 2022, the
minimum hourly wage is $12.80 and will be
$13.85 in 2023.
15
The Act also entitles employees to earn 1
hour of paid sick time for every 30 hours worked,
up to 24 hours annually if the employer has fewer
that 15 employees and up to 40 hours annually if
the employer has at least 15 employees. In either
case, employers may select a higher limit for
accrual and use of earned paid sick time per
year.
16
The ICA is charged with enforcement and
implementation of the Act, including the
promulgation of consistent regulations. Any
person or organization may file an administrative
complaint with the ICA charging that an
employer has violated the minimum wage
requirements. Additionally, a law enforcement
officer or any private party injured by a violation
may maintain a civil action to enforce the
requirements.
17
11
DOL: Fact Sheet #17A: Exemption for Executive, Administrative,
Professional, Computer & Outside Sales Employees
12
DOL: Subminimum Wage
13
DOL: Tips
14
AZ SOS: Proposition 202 (2006)
15
ICA: Minimum Wage
16
A.R.S. § 23-372
17
A.R.S. Title 23, Chapter 2, Article 8 and 8.1; AZ SOS:
Proposition 206 (2016); A.R.S. § 23-363
Arizona Senate Research Staff, 1700 W. Washington Street, Phoenix, AZ 85007
Retaliation
An employer may not discriminate or subject
a person to retaliation for asserting a minimum
wage or earned paid sick leave claim, informing a
person about their rights or participating in
enforcement investigations or proceedings.
Retaliation is the denial of minimum wage or
earned paid sick time to an employee or any
threat, discharge, suspension, demotion,
reduction of hours or any other adverse action
against an employee for the exercising their right.
An employer that takes an adverse action
against an employee within 90 days of the
employee engaging in a protected action is
presumed to be guilty of retaliation. The
presumption may be rebutted by clear and
convincing evidence that the action was taken for
other permissible reasons. Employers guilty of
retaliation are required to pay the employee an
amount set by the ICA or a court to compensate
the employee and deter future violations that is at
least $150.00 for each day the violation
continued.
18
Payment of Wages
In most cases, employers must pay
employees at least twice per month, no more than
16 days apart and within five of the employer’s
working days after the end of the pay period.
Requirements differ for employers whose payroll
services are centralized outside of Arizona.
19
An employer may withhold wages when
required or empowered to do so by Arizona or
federal law (e.g., taxes), when the employer has
prior written authorization from the employee or
when there is a reasonable good faith dispute as
to the amount of wages due.
20
An employee who is discharged must receive
all wages due within seven working days or by
the end of the next regular pay period, whichever
Labor Employment Laws 5
is sooner. School districts must pay wages due to
an employee within 10 calendar days from the
date of discharge. An employee who quits, must
be paid in the usual manner with all wages due
not later than the regular payday for the pay
period during which the termination occurred. If
the employee requests, the employer must mail
such wages.
21
Hours and Youth Employment
State labor laws do not regulate employee
breaks, lunch periods or the number of hours that
may be worked, leaving these to the employer’s
discretion, with some exceptions. Statute
stipulates the number of hours that minors under
the age of 16 may work, as well as the types of
work that minors under the age of 18 may
perform.
22
18
A.R.S. §§ 23-364 and 23-374
19
A.R.S. § 23-351
20
A.R.S. § 23-352
21
A.R.S. § 23-353
22
A.R.S. Title 23, Chapter 2, Articles 3 and 5
Arizona Senate Research Staff, 1700 W. Washington Street, Phoenix, AZ 85007
Labor Employment Laws 6
ADDITIONAL RESOURCES
• Labor Employment Statutes: A.R.S. Title 23,
Chapters 2, 8 and 9
• Discrimination in Employment Statutes:
A.R.S. Title 41, Chapter 9, Article 4
• Arizona Constitution, Articles 18 and 25
• Americans with Disabilities Act: 42 U.S.C.
12101, et seq.
• Civil Rights Act, Title VII: 42 U.S.C. § 2000e,
et seq.
• Fair Labor Standards Act: 29 U.S.C. 201, et
seq.
• National Labor Relations Act: 29 U.S.C. 151,
et seq.
• Arizona Attorney General, Civil Rights
Division
http://www.azag.gov/civil_rights
(602) 542-5263 (Phoenix)
(877) 491-5742 (Phoenix)
(520) 628-6500 (Tucson)
(877) 491-5740 (Tucson)
• Industrial Commission of Arizona, Labor
Department
www.ica.state.az.us
(602) 542-4515 (Phoenix)
(520) 628-5459 (Tucson)
• Office for Americans with Disabilities
www.know-the-ada.com
(602) 542-6276
(800) 358-3617
• U.S. Equal Employment Opportunity
Commission
www.eeoc.gov
(800) 669-4000
(202) 921-3191
• U.S. Department of Labor, Wage and Hour
Division
(866) 487-9243
Handy Reference Guide to the FLSA
