Although ABC has made every effort to insure the accuracy of Tips and Tools, misinformation, disinformation, changes, mistakes and typos happen, therefore Art & Business Consulting LLC takes no responsibility for any action taken or results based on the information supplied here in.

Some General AZ Employer Information

ABC LLC is not an Human Resource (HR) Specialist, but we are frequently asked about HR types questions.  One good source was a guide from Human Resource Partners LLC in Phoenix AZ.  We took a class from them some time ago and found their guide to be continually useful; they updated it periodically, but employment law changes continually, therefore you should not use this guide as the last-word, but as a starting point in your HR policies and procedures assessment.  Human Resource partners closed their website - I don't know if they went out of business or not but the site is gone. Fortunately I had saved a copy of their guide, so you can download it here in a pdf format - it was free from them, so I am just passing it along.  Please note ABC LLC is not affiliated with Human Resource Partners LLC.  The vast majority of what follows was contained in their guide; their guide is more complete, but not necessarily as up-to-date. 

In summary there are a large number of issues that affect Arizona Employers.  The following list is not all inclusive, nor does it provide, nor is it intended to provide complete or full description, discussion, or analysis of any law, topic, or issue. ABC LLC strongly advises businesses to comply with all employment laws that they are subject to, and consult with an employment lawyer or other employment law specialist when necessary - ABC LLC is not engage to practice law, nor is ABC LLC an HR Specialist. 

Employment at Will, Right to Work, Laws that effect the employment relationship, Poster requirements as they apply to all AZ employers, FLMA changes, New federal minimum wage.

Employment At Will: The doctrine of employment at-will, which was established in the courts, means: When the employment relationship is of no specific duration (no employment contract exists), the employment relationship can be terminated at the whim or will of either party (employee or employer) with or without notice, with or without cause/reason, and without liability to the other party. Corollary: if an employee can resign or quit with or without notice, with or without cause/reason, and without liability, then the employer can discharge the employee with or without notice, with or without cause/reason, and without liability. While it may seem that employment at-will will allow an employer to fire an employee at any time, with or without notice, and with or without cause/reason, the reality is that many laws exist that restrict or limit employment at-will. Also, many court decisions have the effect of restricting or limiting employment at-will. An employer may unwittingly provide an implied employment contract if their employee handbook does not specifically state that it is NOT an employment contract and does not use at-will language; the existence of an employment contract can negate employment at-will; however ABC LLC still advises that employers have an employee handbook. Certain judicial exceptions exist to at-will as well: discharge for whistle-blowing, discharge for refusal to perform an illegal or unethical act, discriminatory discharge etc.

Right to Work: “Right to work” is NOT employment at-will. Many employers believe that when a state is a right-to-work state, as is Arizona, it means the employment relationship can be ended with or without notice, with or without cause/reason, and without liability (i.e., employment at-will). Instead, right to work is a legal principle from the Labor-Management Relations Act (Taft-Hartley Act). Right to work refers to an employee’s right to work without having to be a member of a labor union in order to be hired or without having to join a labor union (or pay union dues) post-employment.

Laws that affect the employment relationship:

• Civil Rights Act of 1964
• Civil Rights Act of 1991
• OSHA - Occupational Safety and Health Act
• ADA - Americans With Disabilities Act
• FMLA - Family and Medical Leave Act: January 16, 2009 new rules to FLMA took effect.
• WARN - Worker Adjustment and Retraining Notification Act
• PRWORA - Personal Responsibility and Work Opportunity Reconciliation Act of 1996
• FLSA - Fair Labor Standards Act: July 24, 2009 Federal Minimum Wage Raised to $7.25 per hour.
• IRCA - Immigration Reform and Control Act
• ERISA - Employee Income Retirement Security Act
• FACT - Fair and Accurate Credit Transactions Act
• ADEA - Age Discrimination in Employment Act
• PDA - Pregnancy Discrimination Act
• Vietnam Veterans Readjustment Act
• Vocational Rehabilitation Act
• Equal Pay Act
• NLRA - National Labor Relations Act (Wagner Act)
• LMRA - Labor-Management Relations Act (Taft-Hartley Act)
• Drug Free Workplace Act
• Employee Polygraph Protection Act
• USERRA - Uniformed Services Employment and Reemployment Rights Act
• Arizona Civil Rights Act (and similar legislation in other states)
• Arizona Workers Compensation Laws
• Arizona Child Labor Laws
• LAWA - Legal Arizona Workers Act
• Arizona Employment Protection Act
• Arizona Minimum Wage Act
• Smoke-Free Arizona Act
• City Ordinances and Acts (i.e., Affirmative Action requirements of contractors to the City of Phoenix; City of Phoenix Smoking Ordinance)   Back to Top

Poster Requirements: Compliance with some of these laws may require the employer to post a poster - it is NOT advisable for small business employers to use the universal posters currently available as many of these laws only apply when an employer reaches a threshold number of employees and posting a universal poster may make an employer subject to laws they would not otherwise be subject to.  Some of these laws apply when an employer reaches a threshold number of employees: 11 or more, 15 or more, 20 or more, 50 or more; therefore the employer should be mindful when they cross one of these thresholds.  Back to Top

Some laws apply to All Employers (1+ employees.), although some businesses or organizations may be exempt from provisions of the laws listed under All Employers based on: the nature of the business or organization; whether it engages in interstate commerce; its annual gross revenues/sales; and/or other factors. Any questions about whether a specific business or organization does or does not have to comply with a specific law should be addressed to a competent labor law attorney or to the agency that administers the law. It is recommended that, unless the business or organization has determined through a labor law attorney or the agency that it does not have to comply with a specific law, it should meet the compliance requirements of that law. Laws affecting All Employers:

• New Hire Reporting (Personal Responsibility and Work Opportunity Reconciliation Act of 1996) Employers are required to report new hires within 20 days of employment. In Arizona, new hires must be reported to the Arizona New Hire Reporting Center. New hires can be reported by sending a copy of the employee’s completed W-4 form or by sending a completed Arizona New Hire Reporting Form. For additional information, contact them at: https://newhirereporting.com/az-newhire/default.asp
• Fair Labor Standards Act (FLSA): The FLSA establishes the minimum wage employers must pay. The federal minimum wage was raised to $5.85/hour as of July 24, 2007. On July 24, 2009, the minimum wage rises to $6.55/hour. And, on July 24, 2009, it raises to $7.25/hour. A poster, "Employee Rights Under The Fair Labor Standards Act" [WH-1088 (rev. June 2007)] must be posted. Employers are to establish a 168 consecutive hour (7 days x 24 hours/day) work week for purposes of calculating and paying overtime. Employers are required to pay overtime wages (at a rate of at least 1.5 times the employee’s regular hourly rate) to non-exempt employees for all hours worked over 40 in a work week. Payment for overtime must be in the paycheck for the work week in which the overtime is worked. Non-exempt employees are NOT allowed to be given “COMP” time in lieu of payment for overtime.
• Immigration Reform and Control Act (IRCA) The IRCA requires that an I-9 form be completed for each new employee within the first 3 days of employment in order that the employer verify the identity and the employment eligibility of the new employee. NOTE: the employee MUST complete Section 1 of the form on his/her first (1 s t ) day of employment. A "Handbook for Employers" (M-274, Rev. 11/21/91) is available from the Bureau of Citizenship and Immigration; call 1-800-870-3676.  The Handbook provides instructions for completing the 1-9 forms and includes the current (and only acceptable) version (Rev. 11/91) of the I-9 form. It also contains copies of documents that are acceptable as proof of identity, proof of employment eligibility, or both. Also starting in 2008 an Arizona employer is required to use e-verify; more on that subject can be found at Adventures in e-verify - there are poster requirements.
• Worker's Compensation Laws of the state of Arizona: All employees, whether full-time, part-time, or temporary, MUST be covered by worker's compensation insurance. For specific information regarding the Arizona Worker's Compensation Law and its compliance requirements, contact the Arizona Industrial Commission. The State Compensation Fund (SCF) in Arizona was formed to make worker's compensation insurance more available to small companies (since many private insurance carriers do not write policies for small businesses/organizations).
• Arizona Civil Rights Act (ACRA) Arizona employers with one (1) or more employees are subject to the sexual harassment provisions of the Arizona Civil Rights Act; so, if a business/organization has one or more employees, its employees have protections from sexual harassment under ACRA.
• Arizona Wage Laws Arizona employers must designate two or more days in each month, not more than sixteen days apart, as fixed paydays for payment of wages to the employees. When an employee is discharged from the service of an employer, he/she must be paid wages due him within three working days or on the next regular payday, whichever is sooner. Employers may not withhold or divert any portion of an employee's wages unless one of the following applies:
  • The employer is required or empowered to do so by state or federal law.
  • The employer has prior written authorization from the employee.
  • There is a reasonable good faith dispute as to the amount of wages due, including the amount of any counterclaim or any claim of debt, reimbursement, recoupment or set-off asserted by the employer against the employee.

Arizona Minimum Wage Act Effective January 1, 2007, the minimum wage in Arizona is now $7.25/hour, which now matches the newly raised Federal Minimum Wage rate. This rate will be adjusted annually based on economic indicators. Requires new hires be given the employer’s name, address, and phone number on the first day of employment. There is a “small business” exemption:

• the business must have gross annual revenue of less than $500,000; and,
• the business must be exempt from paying the minimum wage under the federal Fair Labor Standards Act (FLSA), 29 U.S.C 206(a). Seek legal advice from a labor attorney before making any assumption that your business is exempt - most are not.
• Smoke-Free Arizona Act As of May 1, 2007, employers must prohibit smoking in all public places and place of employment. The only exception is outdoor patios as long as tobacco smoke does not enter, via entrances or windows or ventilation systems or other means, any areas where smoking is prohibited. Certain signage is required at ALL entrances to buildings. For information about signage, go to: http://www.smokefreearizona.org:80/order-signage.asp 
• Arizona Child Labor Laws A.R.S. 23-230 to 23-242 provides guidance regarding “Youth Employment”, including the permissible hours of work for youths under the age of 16, prohibited types of work for youth under age 16, and prohibited types of work for youth under 18.
• Wage Payments, Tax Withholdings (Social Security, Medicare, federal income, state income), and Garnishments
  • With regard to wage payments, see “Arizona Wage Laws”, above.
  • With regard to tax withholdings, employers should obtain and refer to Publication 15, “Circular E, Employer’s Tax Guide”, which is available from the IRS website at: http://www.irs.gov
  • With regard to Garnishments, employers should obtain and refer to Publication WH1324, “The Federal Wage Garnishment Law”, from the Wage & Hour Division of the DOL.
• Employee Polygraph Protection Act The Act restricts the use of polygraphs (which includes lie detector tests, "honesty" tests, and similar tests or activities), except under some very specific conditions and only with the consent of the employee and only if certain procedures are followed and documented. A poster, "Notice: Employee Polygraph Protection Act", must be displayed.
• Fair Credit Reporting Act (FCRA) Background checks/investigations of applicants or employees are considered “consumer reports” under the Act. Applicants or employees must be given a Notice of the employer’s intention to obtain a “consumer report” and authorize the background check/investigation. A copy of the applicant/employee’s rights under the FCRA (”A Summary of Your Rights Under the Fair Credit Reporting Act”) also must be provided to him/her. No adverse employment decision based on the results of the “consumer report” can be made until the applicant/employee is told of the information used to reach the decision and is given the opportunity to correct such information.
• Employee Retirement Income Security Act (ERISA) Sets standards for employee benefits plans to ensure the equitable character of and financial soundness of such plans. Sets standards and rules governing the conduct of plan fiduciaries. Group health insurance plans, profit-sharing plans, 401(k) plans, 403(b) plans, and other such group benefits plans must meet ERISA standards.
• Uniformed Services Employment and Reemployment Rights Act (USERRA) Identifies the obligations employers have with regard to the hiring of members of the uniformed services, providing benefits to such members during periods of active duty, and the re-employment of such members returning from active duty.
• Fair and Accurate Credit Transactions Act (FACT) As of June 1, 2005, all employers are required to destroy any document that has personal information on it prior to discarding the document. Personal information could be a telephone number, address, Social Security number, etc. The law requires the destruction — ‘shredding or burning’ or ‘smashing or wiping’ — of all paper or computer disks containing personal information that is ‘derived from a consumer report’ before it is discarded. This law applies to all employers with one or more employees. The aim is to protect the public from identity theft, one of the fastest-growing crimes in the United States. Many times personal information is stolen from an employer. The information comes from the employer’s paperwork, as well as computer database systems. Employers have a duty to restrict access to this data as well as properly dispose of (destroy) the information. Every employer should establish written guidelines for maintaining confidentiality and placing restrictions on access to and use of this information. The guidelines also should contain provisions regarding data of temporary employees and contract employees.
• NEW! Arizona Mandates MRSA Exposure Poster Jul 22, 2009 Arizona has released a new mandatory poster for all employers titled "Work Exposure to Methicillin-Resistant Staphlococcus Aureus (MRSA), Spinal Meningitis, or Tuberculosis (TB)".  The poster gives employees information on claims relating to work exposure to MRSA, TB and Spinal Meningitis. Under the Arizona Workers' Compensation Law, employees will be notified of any claims made for conditions, disabilities, diseases or infections related to MRSA, Spinal Meningitis and TB.  Exposure evaluation expenses and any follow-ups are covered under the Arizona Workers' Compensation Act if the employee files a claim or reports in writing the details of the exposure. Certain classes of employees may easily establish a claim if the exposure is reported no later than 10 days, or if a diagnosis is made within two to ten days of possible exposure to MRSA, two to eighteen days of possible exposure to Spinal Meningitis or 12 weeks of possible exposure to TB.

As stated previously this list not complete nor is it intend to be - there may be requirements specific to your industry, e.g. employers in the medical fields, employers that are subject to Department of Transportation rules, that are not mentioned.  What constitutes an employee is beyond the scope of this discussion, but is a very important topic with regard to compliance with these laws, tax withholding etc.  Other issues with regard to how the employer handles employee information, how they store it and how long they need to keep it is very important too.  Every business owner should assess their HR policies and practices regularly to keep abreast of changes in HR law.   Back to Top

Changes to FLMA: The most significant changes are

• New military caregiver leave. Employees are allowed to take up to 26 weeks of unpaid FMLA leave in each 12-month period to care for family members who suffered a serious injury or illness while on active military duty.
• New leave for families of National Guard and Reserve members. Families of National Guard and Reserve personnel on active duty are allowed to take up to 12 weeks of job-protected FMLA leave per year to manage their affairs.
  • The FMLA leave of the employee (a spouse, son, daughter or parent of the military member) must be related to certain qualifying circumstances related to the military service. The rules define a qualifying situation as one involving: (1) short-notice deployment; (2) military events and related activities; (3) child care and school activities; (4) financial and legal arrangements; (5) counseling; (6) rest and recuperation; (7) post-deployment activities; and (8) additional activities in which the employer and employee agree to the leave.
• Revised definition of a "serious condition." The new regulations tinker with the definition of an FMLA-qualifying "serious health condition." The law says a serious condition must involve more than three consecutive calendar days of incapacity plus "two visits to a health care provider." One court (the 10th Circuit) threw a wrench into the works by ruling that those two doctor visits must occur within the more-than-three-day period of incapacity. The new rules clarify that those two visits must occur within 30 days of the period of incapacity.
  • Direct contact with doctor allowed. Good news: The new regulations allow employers to directly contact an employee's health care provider to seek clarification about information on an employee's FMLA certification form.
  • Note: An employee's "direct supervisor" is prohibited from making such inquiries. The rules give this right only to a "health care provider, a human resources professional, a leave administrator (including third-party administrators), or a management official." Also, employers can't ask doctors for information beyond what is required by the certification form.   Back to Top

NEW! Effective July 24, 2009, the federal minimum wage increases to $7.25 per hour, however the federal minimum for tipped employees remains $2.13 per hours.

• Employers, please remember that if a tipped employees wages when combined with their tips does not add up to the federal minimum wage the employer is required to make up the shortfall.
• 31 states are affected by this minimum wage increase: Alabama, Alaska, Arkansas, Delaware, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin, and Wyoming.
• No matter what state the employee lives in, the employee is entitled to the highest minimum wage available whether it is the state's minimum or the federal minimum.
• FLSA also mandates time and a half for more than 40 hours worked in a work week by a nonexempt employee, defines what "hours worked" are, has provisions for youth employment, mandates a poster requirement and record keeping.
  

Arizona's current minimum wage is the same as the new federal standard. Arizona's minimum wage for tipped employees is currently $4.25/hour. Again if an employees total wages and tips do not add up to the state minimum wage the employer must make up the difference.  Back to Top