Dear M & M: Any new labor laws go into effect in 2020? – Betty

Dear Betty: “Two wage increases go into effect Jan. 1, 2020. The first one is the minimum salary to exempt executive, administrative and professional employees from the Fair Labor Standards Act. It raises the pay level from $445 per week to $684 per week. The second area under Proposition 206, the Fair Wages and Healthy Families Act (the “Act”), Arizona minimum wage will increase to $12.00 per hour in 2020.

Going forward, on Jan. 1, 2021, the Arizona minimum wage will increase each year by the cost of living. Note: Employers will still be permitted to pay employees receiving tips up to $3.00 per hour less than the minimum wage, provided that the employees earn at least minimum wage for all hours worked each week (when tips are included).

Arizona’s minimum wage laws apply to all “employers.”

Arizona law defines an “employer” in the minimum wage context as any corporation, proprietorship, partnership, joint venture, limited liability company, trust, association, political subdivision of the state, individual or other entity acting directly or indirectly in the interest of an employer in relation to an employee, but does not include the state of Arizona, the United States, or a small business. The definition of “employer” in the minimum wage context was not changed by Proposition 206, the Fair Wages and Healthy Families Act. “Small businesses,” as the term is defined by Arizona law, are excluded from the definition of employer and are exempt from the minimum wage requirements.

Arizona law defines a “small business as any corporation, proprietorship, partnership, joint venture, limited liability company, trust, or association that has less than five hundred thousand dollars in gross annual revenue and that is exempt from having to pay a minimum wage under section 206(a) of title 29 of the United States Code.” Section 206(a) of title 29 of the United States Code is a subsection of the federal Fair Labor Standards Act (FLSA) that requires employers whose employees or enterprises are engaged in “commerce” to pay their employees a minimum wage.

Arizona minimum wage laws do not require employers to pay employees for reporting or showing up to work if no work is performed. An employer is also not required to pay an employee a minimum number of hours if the employer dismisses the employee from work prior to completing their scheduled shift. Employers are only required to pay employees for hours actually worked.”

It is highly recommended to consult an experienced attorney knowledgeable in employment law if you have any concerns or questions.

Source: Industrial Commission of Arizona.

ASK M&M is prepared and submitted by Mark Schmitt, director of the Small Business Development Center at Cochise College; and Mignonne Hollis, executive director at the Arizona Economic Development Foundation. To ask your questions: Call the Small Business Development Center (SBDC) at Cochise College (520) 515-5478 or email schmittm@cochise.edu or contact the Arizona Regional’ Economic Development Foundation at (520) 458-6948 or email hollism@aredf.org; www.aredf.org.

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