Arizona will see another minimum wage hike in 2021

Arizona will see another minimum wage hike in 2021, but state will fall out of top 5 nationally

Arizona’s minimum wage — which already has risen four times in the past four years and currently ranks among the nation’s highest — will increase by 15 cents an hour at the start of 2021, thanks to a small whiff of inflation at the national level.

The modest increase to $12.15 an hour is attributable to a 1.3% rise in the Consumer Price Index over the 12 months through August. Arizona’s minimum wage will adjust further in future years pegged to inflation at the national level.

The Industrial Commission of Arizona, which oversees minimum-wage and related laws, announced the change this month. Arizona’s wage increases based on inflationary changes are rounded in 5-cent increments.

Arizona’s wage among highest but ranking will fall in 2021

Proposition 206, a statewide ballot measure passed by voters in 2016, boosted Arizona’s minimum wage from $8.05 an hour to $10 in 2017, followed by increases to $10.50 in 2018, $11 in 2019 and $12 this year.

Arizona currently is tied for the fifth-highest minimum wage in the country, according to the National Conference of State Legislatures. But as that wage rises in other states, Arizona will come down on the list.

In 2021, Arizona will tie with Maine for the ninth-highest minimum wage among states and Washington, D.C. 

The District of Columbia will lead the list at $15 an hour, followed by California, Washington and Massachusetts. Connecticut, Oregon, New York and Colorado all are expected to surpass Arizona. At the bottom, 21 states follow the federal minimum of $7.25 an hour.

Some cities have adopted higher minimums including Flagstaff, where the current minimum is $13 an hour and is scheduled to jump to $15 in January.

Proposition 206 also mandated a minimum of five paid sick days per year in Arizona at larger employers.

Minimum-wage exceptions

Arizona’s minimum wage doesn’t apply to some workers. These include casual babysitters, people employed by a parent or sibling, federal workers, Arizona state workers and those employed by certain small businesses with annual revenue below $500,000.

These and other requirements are spelled out on posters than employers are required to display in break rooms or other prominent locations.

Employers may pay servers and other tipped workers up to $3 an hour less than the minimum wage if tip income at least makes up up the difference.