New 2022 Minimum Wage is Effective January 1, 2022

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On January 1, 2022, Arizona’s minimum wage will increase from $12.15 to $12.80 in accordance with A.R.S.§ 23-363(B). The 65 cent increase in minimum wage is based on the increase in inflation between August 2020 and August 2021, as published in the U.S. Bureau of Labor Statistics’ Consumer Price Index.

Minimum Wage

Exemptions: Under the Fair Wages and Healthy Families Act (the “Act”), the new minimum wage does not apply to any person who is employed by a parent or a sibling; any person who is employed performing babysitting services in the employer’s home on a casual basis; any person employed by the State of Arizona or the United States government; or any person employed in a small business that grosses less than $500,000 in annual revenue, if that small business is exempt from having to pay a minimum wage under section 206(a0 of title 29 of the United States Code.

Tips and Gratuities Employees: For any employee who customarily and regularly receives tips or gratuities, an employer may pay tipped employees a maximum of $3.00 per hour less than the minimum wage if the employer can establish by its records that for each week, when adding tips received to wages paid, the employee received not less than the minimum wage for all hours worked.

A large number of questions have come into The Industrial Commission of Arizona regarding Prop 206 and the Fair Wages and Healthy Families Act. In the interest of providing a prompt response to the inquiries, the commission has provided answers to frequently asked questions. Because the Act modifies Arizona’s existing minimum wage laws and created earned paid sick time requirements there have been many questions regarding those changes. The Industrial Commission of Arizona, asks residents to review the FAQs about minimum wage and earned paid sick time as posted and to note that there may be some inconsistencies with other information on the site as the changes have not yet gone into effect.

For more information regarding the Act, refer to the Industrial Commission’s website at or contact the Industrial Commission’s Labor Department: 800 W. Washington, Phoenix, AZ 85007 or call 602-542-4515.

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