Arizona Minimum Wage Increases to $7.35 in 2011

The Arizona minimum wage will increase 10 cents from $7.25 to $7.35 per hour on January 1, 2011. The Arizona minimum wage is projected to remain higher than the federal minimum wage throughout 2011.

The Arizona minimum wage for tipped employees also increases 10 cents from $4.25 to $4.35 per hour on the same date. Arizona includes car wash attendants, hair dressers, barbers, valets and service bartenders as tipped employees, along with waiters, waitresses and busboys. However, if the tipped employees wages and tips do not average at least $7.35 per hour worked in the payroll period, the employer must pay the difference in wages.

Arizona Labor Commissioner Laura L. McGrory announced the increase in a recent press release based on a resolution issued by the board of the Industrial Commission of Arizona.

In 2006, Arizona voters passed an amendment to establish a state minimum wage with annual increases based on the cost of living. The Arizona minimum wage increase is based on the federal CPI or Consumer Price Index for All Urban Customers, U.S. City Average for the 12 months ending August 31.

The CPI for the year ending August 31, 2010 showed a modest increase of 1.1%. The CPI is a nationwide index of the cost of goods and services.

The Arizona minimum wage covers almost every employer in the state. The law specifically applies to any company covered under the federal FLSA, including those that generate more than $500,000 per year or engage in interstate commerce.

Unlike many other states, Arizona includes very few exceptions to the minimum wage. Young workers, students, part-time workers, temporary employees and all other workers must be paid at least the state minimum wage.

However, the state does exempt the following persons from the minimum wage:

·    Anyone employed by his or her parent or sibling

·    Babysitters who work on a casual basis in the employer’s home (Child care providers and full-time nannies must be paid the minimum wage)

·    Employees of the state or federal government

When an employee is covered by both the federal and state law, the employee is entitled to coverage under whichever law provides the greater benefit. In this case, an employee covered by both the federal and state minimum wage is entitled to the higher state minimum wage of $7.35 per hour.