Whether you are just taking your first steps into the workforce or are looking for entry-level positions. Understanding the minimum wage in your area is essential. It gives you an opportunity to estimate your earnings and determine if you think the compensation for doing a particular job is fair. Which is based on the workload involved. If you’re looking for employment in the Grand Canyon State. Here’s what you need to know about the minimum wage in Arizona.
What Is a Minimum Wage?
Before digging into the minimum wage in Arizona. It’s important to understand what a minimum wage is and how it works in various scenarios. Generally, the minimum wage is a dollar amount. Marking the lowest amount an employer is allowed to pay per hour when compensating covered nonexempt employees.
While the minimum wage applies to most employees. There are exceptions. For example, young workers during their first 90 consecutive days of employment, student learners, and full-time students working for certain institutions can be paid less. There are also separate rules for disabled individuals who are working under specific types of contracts. As well as for tipped workers.
On the federal level, the minimum wage for covered nonexempt employees is $7.25 per hour. For tipped workers, the federal minimum wage is $2.13 an hour. However, tipped workers still have the right to make the equivalent of $7.25 an hour. If the value of their tips doesn’t bring them to that point, the employer must adjust their hourly compensation for that pay period to ensure they reach the threshold.
The federal minimum wage hasn’t changed since July 2009. At this time, no legislation has passed that would increase it.
Now, it’s important to understand that states and cities can enact their own minimum wage laws. With those, they can require a higher minimum wage than is mandated at the federal level. They aren’t allowed to make the minimum wage lower, however.
Additionally, states and cities can require tipped workers to be given the full minimum wage instead of the reduced rate
What Is the Minimum Wage in Arizona?
In 2020, the minimum wage in Arizona for non-tipped workers is $12.00 per hour. However, employees who receive tips can be paid up to $3.00 less per hour. As a result, the minimum wage for tipped workers in Arizona is $9.00 per hour, suggesting that any tips earned brings them up to the equivalent of $12.00 per hour. If the tips fall short, the employer has to make up the difference.
On January 1, 2021, the minimum wage in Arizona will change. For non-tipped workers, it’s set to rise by $0.15, making it $12.15 per hour. Tipped workers will also see their pay rates go up. Since they can only be paid up to $3.00 per hour less, their minimum wage becomes $9.15 when the new year begins.
Higher Minimum Wages
Some cities in Arizona do have higher minimum wages. For example, in Flagstaff, the minimum wage in 2020 is $13.00 per hour ( $10.00 per hour for tipped workers). On January 1, 2021, it will go up to $15.00 per hour ($12.00 per hour for tipped workers).
Flagstaff also has its 2022 increase planned, with the minimum wage moving up to $15.50 per hour or $2.00 above the state minimum wage, whichever is higher. For tipped workers, they’ll start earning $13.00 per hour or $2.00 above the state minimum wage, whichever is higher, as well.
By 2023, the Consumer Price Index (CPI) will play a role in Flagstaff’s minimum wage. The minimum wage will be adjusted based on shifts in the CPI, though it will never be less than $2.00 above the state’s minimum wage.
Do you think the minimum wage in Arizona is high enough? Why or why not? Share your thoughts in the comments below.
Read More:
- What Is the Minimum Wage in Alaska?
- 5 Proven Ways to Increase Your Income Over the Next 3 Years
- Minimum Wage Worker Needs 2.5 Full-Time Jobs to Afford 1-Bedroom Apartment
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Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
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