Compliance Watch:
Penalties for Breaking Arizona Labor Laws

April 12th 2024

Labor laws play a critical role in safeguarding the rights and well-being of workers, ensuring fair treatment and equitable practices in the workplace. For businesses operating in Arizona, compliance with these labor laws is not just a moral and ethical obligation but also a legal requirement. Failing to adhere to labor laws can result in severe penalties and consequences that can significantly impact both the reputation and financial stability of a business.

In this article, we will explore the various penalties that businesses may face when they fail to comply. By familiarizing themselves with these penalties, businesses can mitigate risks, maintain a positive reputation, and create a work environment that respects and upholds the rights of their employees.

This Article Covers

Most Common Labor Law Violations in Arizona
Penalties for Breaking Arizona Labor Laws
How You Can Avoid Violating Arizona Labor Laws

Most Common Labor Law Violations in Arizona

Arizona, like any other state, has specific labor laws in place to protect the rights of employees. However, certain violations of these laws are more common than others. Here are some of the most common labor law violations in Arizona and how businesses may unwittingly commit them:

  • Sexual Harassment: Sexual harassment can come in many forms such as unwelcome advances or inappropriate comments. Some businesses may unknowingly tolerate or perpetrate harassment in the workplace, creating a hostile work environment based on gender. During the fiscal year of 2015, the U.S. Equal Employment Opportunity Commission (EEOC) determined that 29.1% of workplace charges in Arizona were related to sexual harassment.
  • Failure to Provide a Safe Working Environment: Employers have a legal obligation to provide a safe and healthy workplace for their employees. Violations can include not adhering to Occupational Safety and Health Administration (OSHA) guidelines, neglecting to address hazardous conditions or inadequate training, or failing to implement proper safety protocols and equipment. These kinds of violations are more common in construction and manufacturing industries.
  • Minimum Wage and Overtime Violations: Arizona has specific laws regarding minimum wage and overtime pay. Violations may occur when businesses fail to pay employees the state or federal minimum wage, illegally withhold wages, or misclassify employees as exempt from overtime pay.
  • Wrongful Discharge/Termination of Employment: Wrongful discharge can happen when employers terminate employees in violation of labor laws. This includes retaliatory actions against employees who report illegal activities or exercise their legal rights, discriminatory terminations based on protected characteristics, or dismissals without following proper procedures.

By understanding and actively addressing these common labor law violations, businesses in Arizona can foster a positive and compliant work environment, promoting employee well-being and organizational success.

Penalties for Breaking Arizona Labor Laws

There are various penalties that businesses may face for violating key Arizona labor laws. From financial penalties to legal actions, understanding the repercussions of non-compliance can help encourage employers to operate within the bounds of the law.

Arizona Civil Rights Act

Article 4 of the Arizona Civil Rights Act provides protections against discrimination in various areas, including employment, housing, and public accommodations. The Act covers a wide range of workplace practices, including hiring, promotions, terminations, wages, and terms and conditions of employment. This ensures that employers assess candidates based on their abilities and qualifications rather than their identity.

Penalty for Violation

Under the Arizona Civil Rights Act, the Arizona Attorney General’s Office is responsible for enforcing the law and investigating complaints of discrimination. If a violation is found, the Attorney General may seek various remedies and penalties, including:

  • Injunctive Relief: The court may issue an order to stop the discriminatory practice and prevent its recurrence.
  • Compensatory Damages: The victim of discrimination may be awarded damages to compensate for any harm suffered, such as emotional distress or economic losses.
  • Punitive Damages: In cases of willful or malicious discrimination, the court may award punitive damages, which are intended to punish the wrongdoer and deter future misconduct.
  • Attorney’s Fees and Costs: The court may order the party found guilty of discrimination to pay the attorney’s fees and costs incurred by the prevailing party.

Arizona Minimum Wage Laws

Arizona’s minimum wage is set by The Fair Wages and Healthy Families Act and currently it’s set at $14.35 per hour. It’s important to mention that individuals under 20 years old have a separate minimum wage of $4.25 per hour for the first 90 days of employment. Moreover, full-time students in Arizona have a minimum hourly wage of $12.20, which is 85% of the regular minimum wage.

Penalty for Violation

Employers who fail to comply with The Fair Wages and Healthy Families Act and don’t pay at least the minimum wage may be fined a minimum of $250. For subsequent or willful violations, the penalty increases to a minimum of $1000. Additionally, special monitoring and inspections may be imposed to ensure compliance.

FLSA Overtime Laws

Unlike some states, Arizona does not have specific daily overtime regulations. It only follows the overtime guidelines set by the Fair Labor Standards Act (FLSA). According to FLSA, any work performed over 40 hours in a week is considered overtime.  Hourly employees are entitled to receive 1.5 times their regular hourly wage for overtime work i.e. $21.53.

It’s important to note that Arizona follows both federal and state regulations, with state law taking precedence in case of any discrepancies. To dig deeper into overtime regulations in the state, check out our comprehensive guide on Arizona overtime laws.

Penalty for Violation

Employers that intentionally or repeatedly violate minimum wage or overtime pay requirements may face civil penalties of up to $1,000 per violation. Whereas, willful FLSA violations can lead to criminal prosecution, with fines up to $10,000. A second conviction may result in imprisonment.

Family Medical Leave Act

The Family and Medical Leave Act (FMLA) is an important federal law that regulates time off at work in Arizona. It allows eligible employees to take up to 12 weeks of unpaid leave for specific family and medical reasons, such as childbirth, adoption, or caring for a family member with a serious health condition. Employers are also required to continue providing health benefits during the leave and reinstate employees to their previous or equivalent positions when they return to work.

Penalty for Violation

The Wage and Hour Division enforces the FMLA for various employees, including those in private, state, and local government sectors. Complaints are investigated, and if violations are found, the U.S. Department of Labor can take legal action to ensure compliance.

Allegations must typically be raised within two years of the violation. In successful cases, the court may order employers to grant FMLA leave and award monetary damages, covering attorney fees and court costs.

Whistleblower Protection Laws

Whistleblower protection laws safeguard employees who report illegal or unethical conduct. In Arizona, whistleblowers are valued for their role in promoting accountability and transparency across public and private sectors.

The Whistleblower Protection Act of 1989 (WPA) prevents federal agencies from punishing federal employees who serve as whistleblowers. It prohibits the termination or demotion of whistleblowers, along with other penalties like blacklisting, pay reduction, reassignment, or changes in duties.

In the private sector, state protection applies to employees reporting violations of Arizona statutes or the Arizona Constitution.

Penalty for Violation

An employee who has been discharged or discriminated against because of filing a complaint, instituting a proceeding, or testifying regarding a violation of health or safety statutes may file a complaint with the commissioner within 30 days of violation. They can be rewarded reinstatement, back pay, and other appropriate relief.

Employers who willfully and repeatedly violate Whistleblower protection laws can be fined a maximum $7,000 for each violation; minimum $5,000 for each violation.

Recordkeeping Laws

Employers in Arizona are required by the Federal Labor Standards Act (FLSA) to maintain accurate employment records for specific periods of time. These records are important for audits, legal proceedings, and tax purposes. The retention requirements are as follows:

  • 1 year: Keep records of employment information, employee I-9 forms, and details such as name, hire/termination dates, remuneration, bonuses, and workplace.
  • 2 years: Retain documents related to basic employment and earnings, including timecards, billing records, and pay stubs.
  • 3 years: Store payroll agreements, bargaining agreements, sales records, and purchase records.
  • 5 years: Preserve records of job-related injuries.
  • 6 years: Keep annual reports for benefit plans.
  • 30 years: Retain records of exposure to toxic substances.
Penalty for Violation

Failure to maintain the necessary records as mandated by the FLSA can result in penalties. Although the Department of Labor does not have the authority to impose civil monetary penalties for recordkeeping violations, deliberate violators of the law can face criminal consequences. Criminal sanctions may include substantial fines of up to $10,000, imprisonment for a maximum of six months, or both.

Arizona Child Labor Laws

Child labor laws in Arizona aim to protect children from exploitation and dangerous work environments. Minors under 18 can be employed in the state without the need for special forms or written parental consent. However, employers are required to ask for proof of age, which can be any valid legal document.

There are also various restrictions that minors working in Arizona should follow:

  • Children under 18: They can’t work more than 8 hours a day or 40 hours a week. They must have regular breaks and cannot work between 10 p.m. and 6 a.m., unless employed by their parents in safe occupations.
  • Children under 15: During school hours, they can’t work for more than 30 minutes at a time. They need a work permit before starting any job. In general, children aged 13 or younger are not allowed to work in Arizona, except in certain limited cases.
  • Hazardous activities: Minors are prohibited from engaging in risky tasks like operating machinery, handling explosives or toxic substances, climbing ladders, driving vehicles, and other activities that pose a threat to their health and safety.
Penalty for Violation

Employers in Arizona who violate child labor laws face penalties based on the offense’s severity. Violations can result in fines up to $10,000 per violation and potential criminal penalties for willful or intentional violations. In certain cases, employers may even be prohibited from hiring minors or have their business license revoked.

How You Can Avoid Violating Arizona Labor Laws

Tip #1 Know the basics

Start by familiarizing yourself with the fundamental labor laws in Arizona. This guide is a good place to start. Key areas to focus on include minimum wage requirements, overtime pay, meal and rest breaks, child labor restrictions, and anti-discrimination laws.

Labor laws may also change over time, so it’s crucial to stay updated on any revisions or new regulations. It’s best to regularly review resources such as the Arizona Department of Labor’s website or consult with legal counsel to ensure ongoing compliance with labor laws.

Tip #2 Maintain accurate records

Accurate record-keeping is key to demonstrating compliance with labor laws. Make sure to keep thorough records of employee hours worked, wages paid, employment contracts, and other relevant documentation as required by state and federal laws. These records can protect you in the event of an audit or legal dispute. To make record keeping and time tracking easier, you can use a time tracking software.

Tip #3 Pay Attention to Minimum Wage Requirements

Ensure that you pay your employees right. This is where most employee disputes stem from. Arizona requires you to pay your employees at least the minimum wage and provide overtime pay (1.5 times the regular rate) to eligible employees who work more than 40 hours in a week.

Tip #4 Implement Workplace Safety Measures

OSHA lawsuits can be costly. Save your business the trouble and comply with the Arizona Division of Occupational Safety and Health (ADOSH) standards to maintain a safe and healthy work environment. Provide necessary safety training, maintain appropriate safety protocols, and address any workplace hazards promptly.

Tip #5 Seek Legal Guidance

When in doubt or facing complex labor law matters, it is advisable to consult with an employment attorney or seek expert legal advice. They can provide specific guidance tailored to your situation and ensure compliance with Arizona labor laws.

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.