What Is the Minimum Wage in Phoenix, Arizona?

The minimum wage in Phoenix, Arizona is $15.15 per hour as of January 1, 2026. Phoenix does not set its own local rate, so every private employer in the city follows the statewide minimum established under the Fair Wages and Healthy Families Act, which Arizona voters approved as Proposition 206 in 2016.¹ The rate is well above the federal floor of $7.25, so the state figure is what controls your paycheck.²

The $15.15 rate reflects a $0.45 bump from the 2025 rate of $14.70, driven by 3.1 percent inflation measured between August 2024 and August 2025.¹ It applies no matter the size of the business, the industry, or how the company is organized. Employers must also post the Industrial Commission of Arizona’s minimum-wage notice and the separate federal Fair Labor Standards Act poster in the workplace.³

What Tipped Workers Earn

If you customarily and regularly receive tips, your employer can pay a base cash wage as low as $12.15 per hour by claiming a tip credit of up to $3.00 per hour. Your combined wages and tips still have to average at least $15.15 for every hour you worked during the pay period. The employer verifies this using records of charged tips or your FICA declarations, and must make up any shortfall.⁴

Because tips are averaged across the payroll period, a slow shift can be balanced out by a busy one in the same cycle. The federal cash wage for tipped employees is only $2.13, but Arizona’s higher $12.15 figure applies in Phoenix because workers get whichever rule is more favorable.⁵

Who Isn’t Covered

Arizona’s minimum wage reaches most workers, but a few narrow categories fall outside it:

People employed by a parent or sibling.
Casual babysitters who work on an irregular basis in the employer’s home.
Employees of the State of Arizona or the federal government, who are paid under separate systems.
Workers at businesses grossing under $500,000 a year that are also not required to pay the federal minimum wage.

That last exemption is narrower than it sounds. Federal minimum-wage coverage reaches any business whose employees handle goods that crossed state lines or process interstate transactions, which captures most modern operations. The Industrial Commission of Arizona notes that the vast majority of businesses under the $500,000 threshold still owe the state minimum wage because of this federal overlap.⁶

Salaried workers in executive, administrative, or professional roles can also be exempt from minimum wage and overtime under the federal FLSA. The qualifying salary is at least $684 per week, and the job duties must center on management, business operations, or specialized professional work.⁷

How the Rate Changes Each Year

Arizona’s minimum wage adjusts automatically every January 1 for inflation. The Industrial Commission compares the national Consumer Price Index for All Urban Consumers in August of the current year to the index for August of the prior year, applies that percentage to the existing wage, and rounds to the nearest five cents.⁴ No legislative vote is required.

If inflation is flat or negative, the rate stays put. It can never drop. The commission publishes the new figure each fall, giving employers several months to update payroll before January 1.⁸

Overtime and Breaks

Arizona has no state overtime statute, so the federal Fair Labor Standards Act governs overtime in Phoenix. If you’re covered and work more than 40 hours in a single workweek, your employer must pay at least one and a half times your regular hourly rate for every hour beyond 40.⁹ A workweek is any fixed seven-day period. There is no federal cap on how many hours an adult worker can be scheduled, as long as the overtime premium is paid.

Neither state nor federal law requires meal periods or rest breaks. When employers do offer short breaks of about 5 to 20 minutes, federal rules treat that time as paid work time that counts toward the 40-hour threshold. Meal periods of 30 minutes or more, during which you’re fully relieved of duties, don’t count as work time.¹⁰

If You’re Paid Less Than the Minimum

You can file a wage claim with the Industrial Commission of Arizona’s Labor Department. Include your employment dates, the hours you worked, and what you were actually paid. Once filed, the employer gets written notice and 14 days to respond; if they dispute the claim, you receive their response and another 14 days to submit evidence. The department may try to settle the matter, and if it can’t, it issues a determination that either side can appeal to Superior Court.¹¹

You generally have two years from the last violation to file, or three years if the underpayment was willful. If the commission or a court finds a violation, the employer owes all the back wages plus a penalty equal to twice the amount of the underpayment.¹²

Retaliation Is Illegal

Your employer cannot fire you, demote you, cut your hours, or take any other adverse action because you filed a wage claim, helped a coworker file, or simply discussed your rights. If an adverse action happens within 90 days of your asserting a wage claim, the law presumes retaliation, and the employer has to rebut that with clear and convincing evidence. An employer that retaliates owes you at least $150 for each day the violation continued. Separate civil penalties for record-keeping or posting violations start at $250 for a first offense and $1,000 for subsequent or willful ones.¹²

Federal law adds another layer. Under the Fair Labor Standards Act, workers who face retaliation for filing wage complaints can recover reinstatement, lost wages, an equal amount in liquidated damages, and attorney’s fees, in either state or federal court.¹³

1
Industrial Commission of Arizona. New 2026 Minimum Wage
2
U.S. Department of Labor. State Minimum Wage Laws
3
U.S. Department of Labor. Fair Labor Standards Act (FLSA) Minimum Wage Poster
4
Arizona Legislature. Arizona Revised Statutes Title 23-363 – Minimum Wage
5
U.S. Department of Labor. Fact Sheet 15 – Tipped Employees Under the Fair Labor Standards Act (FLSA)
6
Industrial Commission of Arizona. Frequently Asked Questions About Minimum Wage and Earned Paid Sick Time
7
U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemptions
8
Industrial Commission of Arizona. Frequently Asked Questions About Wage and Earned Paid Sick Time Laws
9
U.S. Department of Labor. Fact Sheet 23 – Overtime Pay Requirements of the FLSA
10
U.S. Department of Labor. Breaks and Meal Periods
11
Industrial Commission of Arizona. Labor – Wage Claims – Frequently Asked Questions
12
Arizona Legislature. Arizona Revised Statutes Title 23-364 – Enforcement
13
Office of the Law Revision Counsel. 29 U.S. Code 216 – Penalties