Employer of Record for Arizona

In Arizona, workers’ rights are protected by numerous employment and labor laws, at both the state and federal level.  As a result, employees enjoy protection from discrimination based on age, religion, sexual orientation, gender, and race. Here are the key things you need to know about hiring in Arizona.

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Do I Need an EIN or Payroll Tax Number To Employ in Arizona?

• Yes, employers in Arizona must have an EIN, issued by the IRS, to hire employees. This number is required for reporting taxes and other payroll-related documents.
• Employers must also register with the Arizona Department of Revenue and the Arizona Department of Economic Security for withholding and unemployment taxes. Registration can be completed online through the state's tax portal.

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Working Hours in Arizona 

• The standard working hours for employees in Arizona are 8 hours per day, or 40 hours per week.
• Arizona follows federal overtime laws, requiring overtime pay for hours worked beyond 40 in a week at a rate of 1.5 times the employee's regular pay.
• There are no specific state laws mandating meal or rest breaks, so federal guidelines apply.

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What Is Considered Full-Time Employment in Arizona?

Full-time employment is generally defined as working at least 30 to 40 hours per week. This is similar to the federal definition used under the Affordable Care Act, which considers 30 hours per week as full-time for certain benefit purposes.

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Probation Period in Arizona

There is no legal requirement for private sector employers to implement probationary periods for new employees. However, for certain public sector positions, probationary periods are mandated. For example, the Arizona Administrative Code specifies that law enforcement personnel must serve a 12-month initial probationary period.

Minimum Wage in Arizona

On January 1st of every calendar year, the minimum wage in Arizona rises due to the increased cost of living. As of 2024, Arizona's minimum wage is $14.35 per hour. Arizona's Under 20 Minimum Wage (for employees under 20 years old) is $4.25 per hour for the first 90 days of employment. Arizona's minimum hourly wage for full-time students is $12.20, which is 85% of the regular minimum wage. In addition, the city of Flagstaff has a higher minimum wage than the state minimum, and it is $17.40 per hour. When it comes to the minimum wage for tipped employees in Flagstaff, it amounts to $15.90 per hour.

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Arizona Anti-Discrimination Laws

Arizona follows strict regulations prohibiting discrimination and wrongful employment termination on multiple grounds.

The Equal Employment Opportunity Commission prohibits discrimination based on:

• Biological sex,
• Race and national origin,
• Age (applies to individuals between 40 and 70 years of age),
• Pregnancy, child, or spousal support withholding,
• Sexual orientation,
• Gender and gender identity,
• Religion,
• AIDS/HIV status, and
• Disability (mental, physical), etc.

Giving bonuses, merits, or deducting wages based on these criteria is also punishable by law.

Arizona law mandates that employers pay employees at least twice a month. This requirement ensures employees are paid no less frequently than semimonthly.

• Employers must provide wages at least twice monthly, with no more than 16 days between pay periods.
• While twice-monthly is the minimum, employers may choose more frequent cycles, such as biweekly (every two weeks) or weekly.

Employment taxes and statutory fees affect both your payroll and your employees’ paychecks in Arizona. Understanding the tax obligations for both employers and employees is crucial when operating in Arizona's business landscape. This section explains how taxes and statutory fees affect payroll and individual earnings in Arizona. Note that employees may be liable for additional local taxes in certain cities and jurisdictions.

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Employer Tax Contributions

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Employee Payroll Tax Contributions

GOOD TO KNOW: Arizona does not impose additional local income taxes or require additional contributions from employees for state disability insurance or other similar programs. Federal payroll tax contributions, including Social Security and Medicare, apply as they do across the United States.

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Tax Due Dates in Arizona

The tax deadline for filing Arizona state income tax returns is typically April 15, aligning with the federal deadline, though extensions to October 15 are available if requested by the original deadline.

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Pension in Arizona 

Arizona does not mandate that private employers provide pension or retirement plans to their employees.

Employers must navigate both federal and state regulations to determine their obligations regarding employee benefits.

As part of our global employment services, Playroll can create a globally compliant and competitive compensation package that can help you attract and retain top talent in the US.

Employee Benefits For Arizona

Competitive benefits are essential for attracting and retaining top talent in Arizona. Offering the right package helps employees feel valued and motivated. Our benefits experts understand the local labor market's trends, requirements, and expectations, ensuring your employees feel valued and supported. Common benefits in our Arizona packages include:

• Pension or 401(K)
• Vision Insurance
• Life Insurance
• Medical Insurance
• Dental Insurance
• Health Savings Plan (HSA)
• Flexible Spending Account (FSA)

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Are Employers Required To Provide Health Insurance in Arizona?

• Employers with fewer than 50 full-time employees are not obligated to provide health insurance.
• Employers with 50 or more full-time employees (or the equivalent in part-time employees) are required to offer health insurance as per federal regulations. 

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Do part-time employees get benefits in Arizona?

There is no federal or state law mandating that employers provide benefits to part-time employees.

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Are Employers Required To Offer 401k in Arizona?

There is no federal or Arizona state law that requires employers to offer 401(k) or other retirement plans to their employees.

Is Vacation Leave Mandatory in Arizona?

It is not mandated by federal law, and Arizona does not require employers to provide paid or unpaid vacation leave. Employers have the discretion to offer vacation leave and may set their own policies regarding accrual, usage, and payout upon termination.

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Mandatory Leave Policies in Arizona

Below are the mandatory leave entitlements for full-time employees in Arizona.

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Paid Time Off in Arizona

Paid time off is not mandated by law.

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Maternity Leave In Arizona

Maternity, paternity, and parental leave are not state-mandated in Arizona but are covered under the federal Family and Medical Leave Act (FMLA) for eligible employees. See more information about leave entitlements in the US in our federal guide. 

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Paternity Leave In Arizona

Maternity, paternity, and parental leave are not state-mandated in Arizona but are covered under the federal Family and Medical Leave Act (FMLA) for eligible employees. See more information about leave entitlements in the US in our federal guide. 

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Sick Leave In Arizona

Paid sick leave is mandated. Employees accrue 1 hour of leave for every 30 hours worked, with annual caps depending on employer size. Sick leave can be used for personal or family illness, domestic violence, and public health emergencies.

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Military Leave in Arizona 

Federal law applies. 

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Jury Duty in Arizona 

Employers must allow time off for jury duty, though they are not required to pay for this leave. Employees cannot be penalised or terminated for serving on a jury and should notify employers upon receiving a summons.

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Parental Leave In Arizona

Parental leave is not mandated by law. Eligible employees can take unpaid parental leave under FMLA for bonding with a new child by birth, adoption, or foster care. For more details on the exact entitlement check out our federal guide. 

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Bereavement Leave in Arizona 

Not mandated by law, but is offered at employer discretion.

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Voting Leave in Arizona 

Arizona requires up to three hours of paid time off for voting if an employee’s schedule does not provide sufficient time while polls are open.

When it comes to terminating employment in Arizona, understanding the legal obligations regarding severance pay and contributions is essential. Below is a detailed overview of the key considerations for both employers and employees.

Termination Process in Arizona

In Arizona, private sector employment follows the "At-Will" employment doctrine. This means that an employee can be terminated, or can quit, at any time without cause or notice, unless the termination violates specific laws (e.g., discrimination, retaliation, or contract terms).

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Notice Period in Arizona

There is no legally mandated notice period for private sector employees in Arizona. Notice requirements may exist if specified in a company policy or an employment contract.

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Severance in Arizona

Severance is not mandated by State law.