Calculating overtime pay in Arizona can be a complex task, especially with varying rules for different types of employees. Employers have to understand the regulations outlined in the federal and state laws to ensure compliance and fair compensation. This article provides a comprehensive guide on calculating overtime pay in Arizona, covering the specific methods and calculations required for different types of employees.

**This Article Covers**

**Understanding Overtime in Arizona**

- Which Overtime Laws Apply in Arizona?
- How Much is Overtime Pay in Arizona?
- Who is Eligible for Overtime Pay in Arizona?
- Who is Exempt from Overtime Pay in Arizona?
- What is the Regular Rate of Pay in Arizona?

**Overtime for Hourly, Salaried, and Tipped Employees in Arizona**

- How do you Calculate Overtime for Hourly Employees in Arizona?
- How is Overtime Calculated for Salaried Employees in Arizona?
- How do you Calculate Overtime for Tipped Employees in Arizona?

**Overtime for Complex Pay Structures in Arizona**

- How do you Calculate Overtime for Commission Employees in Arizona?
- How do you Calculate Overtime for Piece Rates in Arizona?

**Additional Considerations for Arizona Overtime**

- What is the Statute of Limitations for Claiming Unpaid Overtime in Arizona?
- What are the Recordkeeping Requirements for Overtime Wage Compliance in Arizona?

**Understanding Overtime in Arizona**

**Which Overtime Laws Apply in Arizona?**

Arizona follows the federal overtime requirements outlined in the Fair Labor Standards Act (FLSA). The FLSA mandates that most employees are entitled to overtime pay at a rate of 1.5 times their regular hourly wage for hours worked beyond 40 in a workweek. The FLSA sets criteria for determining which employees are exempt from overtime, including executive, administrative, professional, and outside sales employees. In addition, employees must earn at least $844 weekly or $43,888 annually to be considered exempt from overtime requirements.

The state laws in Arizona mirror the federal criteria for exempt employees but enforce a different minimum wage standard. Under the Fair Wages and Healthy Families Act, employees are entitled to $14.35 per hour, greater than the FLSA minimum wage requirement. Employers in Arizona should adhere to both sets of regulations to ensure they meet or exceed the provisions of the FLSA and any relevant state laws.

**How Much is Overtime Pay in Arizona?**

In Arizona, overtime pay is calculated at a rate of 1.5 times an employee’s regular hourly wage for any hours worked beyond 40 in a workweek. This is aligned with the federal regulations set by the FLSA. This rate applies to most employees, though certain exemptions may apply for overtime exemption.

If you want to learn more, check out our guide on Arizona Overtime Laws.

**Who is Eligible for Overtime Pay in Arizona?**

In Arizona, eligibility for overtime pay is primarily governed by the FLSA. Generally, most employees are entitled to overtime pay, one and a half times their regular hourly rate for hours worked beyond 40 in a workweek. However, under federal law, specific categories of employees are exempt from overtime if they meet certain criteria.

Check out our guide on Overtime Rights in Arizona.

**Who is Exempt from Overtime Pay in Arizona?**

Employees who are classified as exempt in Arizona are generally those who fall within these criteria:

**Salary Basis Test**: The employee must receive a fixed salary, regardless of the hours worked or the quantity of work completed.**Salary Level Test:**The employee must earn a salary that meets the minimum requirements of the salary exemption threshold. As of July 2024, the federal minimum salary to be exempt is $844 per week ($43,888 per year).**Duties Test:**The employee’s primary duty must involve managing employees and exercising independent judgment. This includes executive, administrative, professional, and outside sales employees.

In addition, the exemptions also apply to specific employees, which include:

- Airline employees
- Babysitters
- Commissioned sales employees
- Drivers and loaders
- Live-in domestic employees
- Farmworkers on small farms
- Federal criminal investigators
- Fishermen
- Railroad employees
- Salesmen and mechanics
- Switchboard operators
- Taxicab drivers

**What is the Regular Rate of Pay in Arizona?**

The regular rate of pay in Arizona refers to the amount an employee earns for each hour worked and must meet or exceed the minimum wage requirements. Here’s how the regular rate is determined for different types of employees:

- For hourly employees, the regular rate of pay is simply their hourly wage.
- For salaried employees, the regular hourly rate of pay is calculated by the weekly salary divided by 40 hours.
- For piecework or commission employees, the regular hourly rate is calculated by total weekly earnings divided by the total hours worked.

**Overtime for Hourly and Salaried Employees in Arizona**

**How do you Calculate Overtime for Hourly Employees in Arizona?**

Calculating overtime pay for hourly employees in Arizona is straightforward. To calculate:

**Determine the regular hourly rate:**Identify the employee’s standard hourly wage. In Arizona, the minimum hourly wage is $14.35.**Calculate the overtime rate:**Arizona’s overtime rate is 1.5 times the employee’s regular hourly rate for hours worked beyond 40 in a workweek. For example, if an employee earns $14.35 per hour, their overtime rate would be $21.53 ($14.35 x 1.5) per additional hour.**Track hours worked:**Ensure you accurately track the total hours worked each week, including regular and overtime hours.**Calculate overtime pay:**Multiply the overtime rate by the overtime hours worked. For instance, if an employee works 50 hours a week, their overtime hours are 10, and their overtime pay is $215.30 ($14.35 x 10).

To learn more, you can read our guide on Your Rights as an Hourly Employee in Arizona.

**How is Overtime Calculated for Salaried Employees in Arizona?**

Before calculating overtime pay for salaried employees, it must be determined that they are eligible for overtime under the FLSA. Salaried employees who fall into an exempt category may be excluded from overtime pay. To calculate overtime pay, you must:

**Determine the employee’s salary:**Identify the employee’s annual salary.**Calculate the weekly salary:**Divide the annual salary by 52 weeks to calculate the weekly salary. If the annual salary of the employee is $52,000, the weekly salary would be $1,000 ($52,000 / 52).**Determine the regular hourly rate:**Divide the weekly salary by 40 to find the regular hourly rate, assuming a standard 40-hour workweek. With the previous example, the hourly rate would be $25 ($1,000 / 40).**Calculate the overtime rate:**Multiply the regular hourly rate by 1.5 to get the overtime rate. For a $25 hourly rate, the overtime rate would be $37.50 ($25 x 1.5).**Calculate overtime pay:**Multiply the overtime rate by the overtime hours worked. For example, if the employee worked ten additional hours a week, the overtime pay would be $375 ($37.5 x 10).

For more details, check out our guide on Your Rights as a Salaried Employee in Arizona.

**How do you Calculate Overtime for Tipped Employees in Arizona?**

When calculating overtime pay for tipped employees in Arizona, the employer must consider the employee’s base wage and tips. Tipped employees receive a lower base hourly wage, expecting their tips to make up the difference to meet or exceed the minimum wage.

To calculate overtime pay for tipped employees in Arizona, employers must:

**Determine the base hourly rate:**Identify the employee’s base hourly wage. Arizona’s minimum cash wage for tipped employees is $11.35 per hour as of 2024. This rate may vary if the employee’s total earnings meet or exceed the minimum wage.**Calculate the regular hourly rate:**Add the average tips received per hour to the base hourly rate to determine the total hourly wage. For example, if the base rate is $11.35 per hour and the employee receives $3 in tip credit per hour, the total hourly wage is $14.35.**Calculate the overtime rate:**Multiply the regular hourly rate by 1.5 to find the overtime rate. If the total hourly wage is $14.35, the overtime rate would be $21.53 ($14.35 x 1.5).**Determine overtime pay:**Multiply the overtime rate by the number of overtime hours worked. For instance, if the employee worked ten overtime hours a week, the overtime pay would be $215.30 ($21.53 x 10).

**Overtime for Complex Pay Structures in Arizona**

### How is Overtime Calculated for Piece Rate Employees in Arizona?

Piece rate employees are paid a set amount per unit of work completed, such as per item produced or task performed. When calculating overtime pay for piece rate employees, employers must:

**Determine the piece rate:**Identify the rate the employee is paid per unit of work completed, such as per item produced or task completed.**Calculate the total earnings:**Multiply the number of units completed by the piece rate to find the employee’s total earnings for the workweek.**Calculate the regular hourly rate:**To determine the regular hourly rate, divide the total earnings by the total number of hours worked in the workweek. For example, if employees earned $800 for 40 work hours, their regular hourly rate would be $20 ($800 / 40).**Determine the overtime rate:**Multiply the regular hourly rate by 1.5 to find the overtime rate. For a $20 hourly rate, the overtime rate would be $30 ($20 x 1.5).**Calculate overtime pay:**Identify the number of overtime hours worked. Hours beyond 40 in a workweek are considered overtime. Multiply the overtime rate by the number of overtime hours. For instance, if employees worked 10 overtime hours, their pay would be $300 ($30 x 10).

### How is Overtime Calculated for Commission Employees in Arizona?

Commission employees earn a percentage of sales or profits in addition to their base pay, and this total compensation must be factored into overtime calculations. To calculate overtime pay for commission employees in Arizona, employers must:

**Determine the employee’s total earnings:**Calculate the employee’s total earnings for the workweek, including commissions. This is the sum of the base salary plus any commissions earned.**Calculate the employee’s regular hourly rate:**Divide the total weekly earnings by the total number of hours worked in the week. For example, if an employee earned $800 in commissions and their base wage is $400 for the week, their weekly earnings would be $1,200. If the employee worked 40 hours, the regular hourly rate would be $30 ($1,200 / 40).**Determine the overtime rate:**Multiply the regular hourly rate by 1.5 to find the overtime rate. For a regular hourly rate of $30, the overtime rate would be $45 ($30 x 1.5).**Calculate overtime pay:**Identify the number of overtime hours worked; those over 40 in the workweek are considered overtime. Multiply the overtime rate by the number of overtime hours worked. For example, if the employee worked 10 overtime hours, the overtime pay would be $450 ($45 x10).

**Additional Considerations for Arizona Overtime**

**What is the Statute of Limitations for Claiming Unpaid Overtime in Arizona?**

The statute of limitations for claiming unpaid overtime is governed by the FLSA. Employees generally have **two years** from when the overtime was due to file a claim for unpaid wages. However, if the violation is willful, the statute of limitations extends to **three years**.

Employees should keep accurate work hours and pay records to ensure timely filing. Employees are advised to consult with a labor attorney or contact the U.S. Department of Labor’s Wage and Hour Division (WHD) for guidance if pursuing a claim.

### What are the Recordkeeping Requirements for Overtime Wage Compliance in Arizona?

In Arizona, as under federal regulations, employers are required to keep accurate records to comply with overtime wage laws. The essential recordkeeping requirements include:

**Hours worked:**Employers must maintain detailed records of the hours worked daily and weekly for all non-exempt employees. This includes regular hours, overtime hours, and any breaks taken.**Wages paid:**Employers need to keep records of the wages paid to each employee, including the regular rate of pay, overtime rate, and total earnings. This includes a breakdown of hourly wages and any overtime compensation.**Payroll records:**Employers should document pay periods, dates on which employees are paid, and records of deductions made from wages.**Employee information:**Maintain records of employees’ names, addresses, and job titles. This information helps ensure proper classification and compliance with wage and hour laws.**Timekeeping methods:**Employers should document the process of tracking employees’ time, whether through manual timesheets, automated time and attendance software, or other timekeeping systems.**Workweek periods:**Keep records of each workweek’s start and end dates, as overtime calculations are based on a 40-hour workweek.

Employers must keep these records for at least three years to comply with both federal and state requirements. Proper recordkeeping helps ensure accurate payment of wages, including overtime, and protects against potential disputes or audits.

**Important Cautionary Note**

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.