Compliance Watch:

What are my rights as a salaried employee in Arizona?

Arizona defines salaried employment as per the regulations of the Fair Labor Standards Act (FLSA). In the state, a salaried employee is any worker who receives a fixed and predetermined compensation at the end of every pay period regardless of the quality or quantity of their work. Laws for salaried employees in Arizona require employers to pay salaried employees their dues at least twice a month with no more than 16 days between pay periods. 

Salaried employment in Arizona falls under two categories based on eligibility for overtime pay. The first category of salaried employees is not subject to overtime laws and is not eligible for overtime pay or compensatory time.

The second category comprises non-exempt employees who earn overtime pay for any time worked above 40 hours in a workweek. A workweek in the state is 7 days long starting from 12 AM on Saturday and ending at 11:59 PM the following Saturday.

Here are some basic rights extended to salaried employees as per Arizona employment laws:

• Minimum Wage: Salaried employees in Arizona are entitled to receive compensation of at least the state’s minimum wage of $14.35 regardless of their eligibility for overtime or frequency of payment. 
• Overtime Pay: Some salaried employees may be eligible for overtime pay for working more than 40 hours in a workweek. Eligible salaried employees should receive overtime pay at a rate of 1.5 times their regular rate or 1.5 hours of compensatory time for every hour of overtime. 
• Anti-Discrimination: Salaried employees in Arizona are protected by state laws that prohibit discrimination in recruitment, discharge, compensation, and employment privileges or conditions based on race, color, religion, gender, national origin, and disability.
• Paid Leave: Salaried employees in Arizona are entitled to paid sick leave for medical care for them or their immediate family members, public health emergencies affecting them or their immediate family members, and domestic or sexual violence against them or their immediate family members. Additionally, eligible salaried employees may be entitled to unpaid leave under the federal Family and Medical Leave Act (FMLA).
• Equal Pay: Arizona laws prohibit employers from paying different salaries to employees who perform the same quantity and quality of the same class of work. Therefore, salaried employees in Arizona have the right to equal pay for equal work. 
• Retaliation Protection: Arizona’s whistleblower laws protect salaried employees in the public and private sectors from retaliation by their employers for asserting their rights by filing complaints, participating in an investigation, or testifying in labor violation proceedings.
• Rights Upon Termination: Arizona is an at-will employment state. As such, an employer can terminate employment at any time. However, salaried employees are protected from losing their jobs for exercising their civic duties, membership or non-membership to a labor union, serving in the national guard or armed forces, or exercising any other rights accorded to them by state and federal labor laws. 

It is important to remember that labor laws can change. Therefore, it is advisable to consult the Industrial Commission of Arizona or seek legal counsel for the most current information regarding the rights of salaried employees in Arizona.

Yes, it is essential to note that receiving a fixed salary at the end of every pay period does not exempt you from overtime pay. Some salaried employees in the state are entitled to overtime pay for all time worked above 40 hours in a workweek.

Arizona laws uphold federal overtime exemptions but make a few exceptions for other salaried employees. As per the FLSA and Arizona overtime laws, overtime pay applies to salaried employees who:

• earn less than $684 a week ($35,568 a year).
• are engaged in law enforcement activities.
• are engaged in firefighting activities.
• are certified by the Arizona Peace Officer Standards and Training Board and are serving within the covered service.

However, overtime pay does not apply to the following categories of salaried employees if they earn more than $684 per week:

• Executive Employees: Bona fide salaried executive employees who manage an enterprise or one of its departments and supervise two or more full-time employees regularly are not eligible for overtime pay and are not subject to overtime laws. 
• Administrative Employees: Salaried administrative employees who perform office or non-manual work related to the management or general business operations of their employers’ business or customers are exempted from overtime pay if their roles require them to exercise discretion and independent judgment.
• Professional Employees: Learned professionals whose work requires advanced knowledge in fields of science or learning and creative professionals who work in recognized artistic or creative fields are not eligible for overtime pay. 
• Computer Employees: Employees engaged in computer-related professions such as systems analysis, programming, software engineering, or other similarly skilled computer-related occupations are exempt.
• Outside Sales Employees: Overtime pay does not apply to employees in sales positions whose work takes them away from the employer’s place of business. 

Please note that meeting these criteria alone does not automatically exempt an employee from overtime pay. Salaried employees in these categories must meet the salary threshold to qualify as exempt. Further, the salary threshold and specific criteria for exemption can change over time. Therefore, it’s essential to consult the FLSA or seek legal counsel for the most up-to-date information.

Yes. Article 7 of the Arizona Revised Statutes allows employers in the state to make the following deductions from an employee’s salary:

• Any deductions that are required and authorized by law. These include state and federal taxes and court-ordered garnishments such as child support, alimony, and payments to creditors. 
• Regular voluntary deductions such as healthcare, retirement, and social welfare contributions, charitable donations, and contributions to segregated funds. Employees must authorize all voluntary deductions.
• Single non-political deductions.

There is no provision for rest or meal breaks for salaried employees under Arizona leave laws. Similarly, employees in the state are not guaranteed paid or unpaid vacation leave. However, the state laws require all employers except small businesses to provide paid sick leave to employees. 

Paid sick leave is compensated at the same rate as regular pay and employees continue to enjoy all other benefits when they are on sick leave. Employees whose employer has 15 or more employees accrue paid sick leave at a rate of one hour for every 30 hours worked for up to 40 days a year. Employees whose employers have less than 15 employees accrue sick leave at the same rate but their earned sick time is capped at 24 days a year. 

The state has separate requirements on paid and unpaid leave for salaried employees of state agencies as follows:

• Salaried employees who are eligible for unpaid leave under the FMLA can take up to 12 weeks of unpaid leave to recover from illness or take care of ailing members of their immediate family. The employees can also take up to 26 weeks unpaid leave to take care of injured military officers in their immediate family. 
• Salaried employees who are scheduled to work on state holidays can take the day off without losing their pay for the number of hours they were scheduled to work for the day. Non-exempt salaried employees who are required to work on state holidays are entitled to additional pay at their current rate for each hour worked.
• All salaried state employees in Arizona are entitled to annual leave, which is accrued at a rate of 4 hours for every two weeks of work for up to 320 hours for uncovered employees and 3.70 hours for every two weeks worked for up to 240 hours annually for covered employees.
• Arizona state laws require employers to provide paid sick leave to salaried employees. The employees accrue sick leave at 3.7 hours bi-weekly. For employees who are eligible for FMLA, paid sick leave counts as part of the family and medical leave provided by the federal act. 
• State employees are also entitled to paid administrative leave of up to 80 consecutive hours and paid bereavement leave of 24 hours for the funeral of a close family member. Additionally, they get PTO for civic duties including voting, jury duty, and when complying with a subpoena.

According to the U.S. Department of Labor, flexible work arrangements refers to schedules that deviate from the standard 9-5 schedules and 40-hour weeks. Arizona state laws encourage alternative work arrangements but leave the specifics to agreements between employers and employees. Therefore, the state does not limit employers in the state to specific ones.

Some state agencies have adopted different variations of flexible arrangements such as the compressed workweek, under which employees work 40 hours a week in less than five days and compressed work schedules that allow employees to work whenever they choose as long as they put in 80 hours every two weeks.

An exempt employee in Arizona is any employee who receives a predetermined, fixed salary that doesn’t fluctuate based on the number of hours worked or the quality of their work and meets the following criteria:

• Receives the federal minimum salary threshold for exempt status of $684 a week or ($35,568 per year) or more.
• Is not entitled to overtime pay for working more than 40 hours in a workweek. 
• Is protected from termination for taking up to 12 weeks of unpaid leave as per the FMLA.
• Falls under one of the following exemption categories:
  
  1. Executive Employees: Bona fide salaried executive employees who manage an enterprise or one of its departments and supervise two or more full-time employees regularly are not eligible for overtime pay and are not subject to overtime laws.
  2. Administrative Employees: Salaried administrative employees who perform office or non-manual work related to the management or general business operations of their employers’ business or customers are exempted from overtime pay if their roles require them to exercise discretion and independent judgment.
  3. Professional Employees: Learned professionals whose work requires advanced knowledge in fields of science or learning and creative professionals who work in recognized artistic or creative fields are not eligible for overtime pay.
  4. Computer Employees: Employees engaged in computer-related professions such as systems analysis, programming, software engineering, or other similarly skilled computer-related occupations are exempt.
  5. Outside Sales Employees: Overtime pay does not apply to employees in sales positions whose work takes them away from the employer’s place of business.

Exempt status has numerous advantages to businesses and employees. 

First, businesses that employ exempt salaried employees in managerial roles benefit from the employees’ flexibility, which allows them to exceed 40 hours in a workweek or 80 hours in a pay period without requiring additional compensation. Similarly, businesses that employ exempt professionals harness the expertise and judgment of highly-trained employees without incurring extra labor costs on overtime pay. Their recruitment increases efficiency, cost savings, and quality work.

Exempt employees in Arizona, on the other hand, get job security, benefits such as extended leave, and the freedom to choose flexible schedules that optimize their work-life balance. This results in increased job satisfaction and heightened productivity.

It is important to understand these implications of the Fair Labor Standards Act (FLSA) and Arizona Labor Laws to ensure the accurate classification of employees as exempt or non-exempt. Errors in this regard may result in wage and hour disputes, claims, and legal actions that could lead to significant financial burdens for businesses.

Determining whether an employee qualifies for exempt status is essential for compliance with state wage and hour laws and the Fair Labor Standards Act (FLSA). The following tests will guide you in determining whether you are exempt or non-exempt:

1. The Salary Basis Test: Exempt employees are generally paid on a salary basis. They receive the fixed salary stated on their contract on or before the 1st and 16th days of each month.
2. Salary Level Test: Exempt employees have a minimum salary threshold. The minimum salary threshold for exempt employees in Arizona is $684 per week (or $35,568 per year).
3. Duties Test: An employee’s primary job duties determine their exempt status alongside their basis and amount of compensation. Executive, administrative, professional, computer, and some sales employees in Arizona qualify for exempt status as follows:

1. • Executive Exemption: Bona fide executive employees whose primary duties include the management of an enterprise or one of its departments and the regular supervision of two or more full-time employees are considered exempt if they pass the salary basis and salary level tests. 
   • Administrative Exemption: Bona fide administrative employees whose main duties include office or non-manual work related to the management of their employers’ business or customers and whose duties require them to exercise discretion and independent judgment are exempt if they earn more than $684 per week and earn a fixed salary twice a month.
   • Professional Exemption: Learned professionals whose work requires advanced knowledge in fields of science or learning and creative professionals who work in recognized artistic or creative fields are exempt if they pass the salary basis and salary level tests. 
   • Computer Exemption: Salaried employees engaged in computer-related professions such as systems analysis, programming, software engineering, or other similarly skilled computer-related occupations are exempt if their level of compensation exceeds the FLSA’s minimum salary threshold for exempt employees.
   • Outside Sales Exemption: Salaried employees in sales positions whose work takes them away from the employer’s place of business are exempt if they meet the salary level and compensation basis tests. 

Given the complexity of employment laws in Arizona and the regular changes in state and federal labor laws and regulations, it is advisable to seek legal counsel or consult with a human resources professional for more up-to-date information on your status.

The minimum wage in Arizona is $14.35 per hour. Therefore, non-exempt salaried employees in the state should earn a minimum of $14.35 an hour in addition to overtime at a rate of 1.5 times their regular rate for all hours worked above 40 hours a week. 

Comparatively, exempt employees in the state should earn a minimum of $684 a week or $1368 per pay period as per the FLSA.

Eligible salaried employees in Arizona earn overtime pay for all time worked beyond 40 hours in a workweek. Overtime is compensated at a rate of 1.5 times the regular rate. It’s important to note that overtime pay in the state is computed weekly and not daily. Therefore, an eligible employee can work for more than 8 hours a day without accruing overtime. 

State employees in Arizona can opt for compensatory time instead of overtime pay. Compensatory time is compensated at a rate of 1.5 hours for every overtime hour worked. Please note that private companies in the state cannot offer compensatory time to employees who are eligible for overtime.

Employers in Arizona can make the following deductions from salaried employees’ pay as per Article 7 of the Arizona Revised Statutes:

• Any deductions that are required and authorized by law. These include state and federal taxes and court-ordered garnishments such as child support, alimony, and payments to creditors. The current state income tax rate in the state is 2.5%.
• Regular voluntary deductions such as healthcare, retirement, and social welfare contributions, charitable donations, and contributions to segregated funds. However, these deductions are only permissible under the explicit authorization of the employees.
• Single non-political deductions.

Arizona state law provides various benefits and protections to employees. These include:

1. Minimum Wage: Arizona’s minimum wage rate of $14.35 is significantly higher than the federal minimum wage. 
2. Overtime Pay: Some employees in Arizona earn overtime pay for time worked beyond 40 hours in a workweek. The law requires employers to pay all eligible employees overtime at a rate of 1.5 times their regular wage i.e. $21.53.
3. Paid Sick Leave: Arizona labor law guarantees paid sick leave to employees. Employees of small businesses with less than 15 employees accrue one hour of paid sick leave for every 24 hours worked up to a maximum of 40 hours per year or one hour of paid sick leave for every 30 hours for employees of large companies with more than 15 employees. 
4. Workers’ Compensation: Arizona labor laws require employers to secure compensation insurance to employees who suffer work-related injuries or illnesses. Injured workers receive medical benefits and temporary wage replacement. In instances of permanent disability, eligible workers receive permanent compensation benefits, medical care, and job retraining. 
5. Unemployment Insurance: Arizona laws establish unemployment insurance as a financial cushion for employees who lose their jobs through no fault of their own. However, these benefits are only available to employees whose previous employers paid unemployment tax. 
6. Protection Against Discrimination: Arizona’s labor laws protect employees from discrimination on the basis of race, gender, religion, age, disability, national origin, color, and physical or mental disability.

Employees who believe they have experienced discrimination due to their race, color, national origin, sex, pregnancy or parental status, genetics, religion, age, political affiliation, disability, or retaliation can file a discrimination complaint with the Arizona Department of Economic Security’s Office of Equal Opportunity.

To report wage violations, employees in Arizona can file a claim with the Industrial Commission of Arizona Labor Division by filling out the appropriate claim form. Finally, you can report safety violations and health hazards directly to the Industrial Commission of Arizona Division of Occupational Safety & Health by filling out the notice of alleged safety or health hazards form.