Arizona statues do not address or define the distinction between blue-collar and white-collar jobs. Generally, jobs that supervise subordinates or that manage a unit of a business are considered supervisory or management positions under federal and Arizona law.

Supervisors and management are treated differently under the law in multiple respects. Information known to them is deemed known by their employer. This factor is particularly important in sexual harassment cases. A supervisor’s conduct subjecting a subordinate to sexual conduct in exchange for a job action is tangible job action harassment for which the employer is liable. A supervisor’s awareness of offensive work environment sexual harassment can also create liability by the company.

A manager’s actions and statements can bind the employer within the scope of their actual or apparent authority. The employer is entitled to have its counsel present during government agency investigatory interviews of them, and opposing counsel must refrain from communicating directly with them without the consent of the employer’s counsel.

Under the Arizona Employment Protection Act, Arizona Revised Statutes Section 23-1501, all employment in Arizona is deemed to be terminable at will unless there is a written contract, signed by the employer, to the contrary – ie, that provides that employment is for a definite term or that restricts the right of the employer to terminate the employee’s employment.

Other than a provision to supersede the presumption of employment at will, Arizona law does not require employment contracts to be in writing nor impose any formal requirements on employment contracts.

The Employment Protection Act also specifies that employment handbooks or manuals are not considered part of the employment contract unless the handbook or manual states that it is the employer’s intent that the handbook or manual be contractual.

Arizona courts will not enforce terms in employment contracts that violate the fundamental public policy of Arizona. Arizona courts will give greater leeway to the parties to adopt contract terms that vary from Arizona law in cases that involve executive-level employees who are represented by counsel and who have substantial bargaining power, as illustrated by Swanson v Image Bank, Inc, 206 Ariz 264, 268 (2003). 

With the exception of a few industries and youth, Arizona law does not restrict the maximum working hours per day or week. There are limits on the hours that can be worked in certain professions in underground mining, drivers of agricultural products, laundry workers and railroad workers. See Arizona Revised Statutes Section 23-282 to 23-287.

Arizona law does not contain terms for part-time contracts. Flexible arrangements are possible. 

The two leading Arizona statutes that address wages – the Arizona Wage Act and the Fair Wages and Healthy Families Act – do not include overtime provisions. Both of those laws are explained further in 1.4 Compensation. Overtime in Arizona is regulated by the Federal Fair Labor Standards Act.

Arizona voters passed an initiative in 2016 entitled the Fair Wages and Healthy Families Act. See Arizona Revised Statutes Section 23-371 to 23-381. The law mandates that non-exempt employees are to be paid at least the Arizona minimum wage, and they must be eligible for at least either 40 or 24 hours per year (depending on the employer’s size) of paid time off, as explained in 1.5 Other Employment Terms.

The Arizona Minimum Wage increases each year because it is indexed to the rate of inflation. In 2026 the minimum wage is USD15.15 per hour.

Arizona law does authorise a Wage Board to establish lower minimum wages for youth in some occupations. See Arizona Revised Statues Section 23-311 to 23-329.

Arizona does not have what is referred to in some countries as “13th month” pay. Arizona law does not mandate bonuses or increases in compensation.

The major Arizona law affecting compensation is the Arizona Wage Act. See Arizona Revised Statutes Section 23-350 to 23-362. The major provisions of the law provide that Arizona employers:

• must pay employees on regular pay days at least twice per month, no more than 16 days apart;
• cannot withhold more than five days of wages;
• must pay terminated employees a final pay check within seven days of separation or the next regular pay period, whichever is sooner; and
• must pay resigning employees on the next regular pay period. 

If an employer fails to pay all compensation when due, the employee can file a claim with the Industrial Commission of Arizona or may file a lawsuit seeking to recover triple the amount of compensation wrongfully withheld. See Arizona Revised Statutes Section 23-355. The treble damage provision not only applies to regular wages but includes other forms of non-discretionary compensation, such as bonuses and commissions. See Arizona Revised Statutes Section 23-350(7). The judge has discretion as to whether to triple the back pay award, based on whether there was a good faith dispute determining whether the compensation was owed or whether the employer acted in bad faith. See Crum v Maricopa County, 190 Ariz 512 (App 1997).

The Arizona Fair Wages and Healthy Families Act requires employers with 15 or more employees to provide up to 40 hours of paid time off per year. Employers of fewer than 15 employees must provide up to 24 hours of sick time. The time off is accrued at the rate of one hour of leave for every 30 hours of work, starting at the date of hire. Employers can require employees to wait until the 90th day of employment before using paid sick leave. The paid time off may be used for more than health reasons, including family medical care, domestic violence or abuse, or relief from stalking. See Arizona Revised Statutes Section 23-372.

The law includes protections from retaliation, as explained in 7.5 Protected Categories of Employee. Because the Act was passed by voters, a 1998 Constitutional Amendment commonly referred to as “Proposition 105” prevents the Arizona Legislature from repealing the law, and the Legislature can amend it only to further its purpose. 

With one narrow exception mentioned below, the enforceability of non-compete agreements in Arizona is determined by common law, not by a state statute, and is therefore fact-specific based on the nature of the industry and the employee. 

Non-compete agreements can be enforceable if they:

• are reasonable in duration;
• are reasonable in geographic scope;
• are justified by the legitimate business interests of the employer; and
• do not prevent the employee from earning a livelihood. 

See Bed Mart, Inc v Kelley, 202 Ariz 370, 372 (Ct App 2002).

A non-solicitation or anti-piracy agreement, discussed in 2.2 Non-Solicits, is more likely to be enforced because such agreements are more narrowly focused on the employer’s protectable business interests and are less restrictive of employee activities.

Continued at-will employment can provide the consideration for a non-compete agreement. See Mattison v Johnston, 152 Ariz 109, 112-13 (Ct App 1986).

An exception to the above general principles is that an Arizona statute restricts the enforcement of non-compete agreements for broadcast employees. See Arizona Revised Statutes Section 23-494.

Agreements to prohibit ex-employees from soliciting employees and customers are more likely to be enforced than non-compete agreements, because employers have a protectable interest in their relationships with customers and employees, and the confidential nature of many aspects of those relationships can be protected through contractual provisions. 

The enforceability of non-solicitation agreements is enhanced if the restrictions apply only to the customers and employees about whom the ex-employee had access to non-public information, and the employer takes steps to preserve the confidentiality of such information. The enforceability of such provisions may depend upon whether the departed employee developed a relationship with the customer or employee on behalf of the employer or obtained non-public information about the customer or employee during their prior employment. 

The test of validity of restrictive covenants is one of reasonableness. For example, one Arizona case held that an insurance business did not have a claim against an ex-employee when customers transferred to the ex-employee’s new company, because the non-solicitation provision would apply to all former customers, whether or not the ex-employee solicited such customers. The court held that the restrictive covenant’s scope was not reasonably necessary to protect the insurance business and it unreasonably restricted the right of the employee to work in his chosen occupation. See Olliver/Pilcher Ins v Daniels, 148 Ariz 530 (1986).

A general public announcement regarding the change of employer, without more, is generally not treated as solicitation. Targeted mailing of flyers to a former employer’s clients, however, is prohibited solicitation. See Compass Bank v Hartley, 430 F Supp 2d 973 (D Ariz 2006); Alpha Tax Services, Inc v Stuart, 158 Ariz 169 (Ariz App Ct 1988). 

Provisions restricting the solicitation of employees – sometimes called anti-raiding or no-hire provisions – are generally viewed as the most readily enforceable of the restrictive covenants discussed in this section. Unlike a non-compete or a customer non-solicit, an employee non-solicitation provision does not restrict the departing employee’s own ability to earn a livelihood or to work for a competitor; it only restricts the departing employee’s ability to induce former co-workers to also leave the employer. Employers have a recognised protectable interest in the stability of their workforce and in the investment they have made in recruiting, training and retaining their employees, and that interest supports enforcement of a reasonably limited restriction on recruiting former co-workers. 

Consideration is provided by continued employment.

Arizona does not have a specific law governing data privacy of employment information. Employers are subject to Arizona Revised Statutes Section 44-1373, which places certain restrictions on the use of an individual’s Social Security Number (SSN). An employer may not intentionally make the SSN available to the general public, require the transmission of the SSN over the internet unless the connection is secure or the SSN is encrypted, or print the SSN on materials that are mailed to the individual (unless the law requires the SSN to be on the document). For this reason, employers should not use the SSN as the employee identification number and cannot print the full SSN on pay checks.

The Legal Arizona Workers Act prohibits employers from knowingly hiring workers who are not authorised to work in the United States, and mandates that all employers use the E-Verify programme when hiring employees. See Arizona Revised Statutes Section 23-212.

The penalties for knowingly employing unauthorised persons include that the employer’s business licence may be suspended for ten days for a first offence and may be revoked for a second offence. See Arizona Revised Statutes Section 23-212(D).

A challenge to the constitutionality of the Legal Arizona Workers Act was heard and rejected by the US Supreme Court. See Chamber of Commerce of United States v Whiting, 563 US 582 (2011).

Foreign workers are not required to register with the State of Arizona. The Legal Arizona Workers law requires all employers to use the federal E-Verify programme to confirm the authorisation of all new hires to work in the United States. The requirement applies to all employees, whether foreign workers or US workers. E-Verify is otherwise voluntary on a federal basis. 

Arizona does not have laws or regulations restricting mobile work or imposing data privacy on mobile working arrangements.

Arizona law does not restrict or regulate sabbatical leave.

Arizona law does not regulate “new work” arrangements. 

Arizona is a “right to work” state, so employers and unions cannot enter into “closed shop” contracts that require all employees in a bargaining unit to belong to a union. As a result, union membership in Arizona is less common than in non-right-to-work states.

Arizona law does not address the role of employee representative groups, and employers are free to utilise or not recognise such groups as deemed to be in the best interest of their human resources practices.

Arizona law does not address collective bargaining issues. Only federal law applies.

As explained in 1.2 Employment Contracts and also more fully below, the Arizona Employment Protection Act expressly states that employment in Arizona is presumed to be at will unless there is a written contract to the contrary signed by the employer. See Arizona Revised Statutes Section 23-1501. Thus, there are no grounds required for termination. 

As explained by the Arizona Supreme Court in its landmark decision in Wagenseller v Scottsdale Memorial Hospital, 147 Ariz 370 (1985), employment at will means that employers may terminate employees for good cause or for no cause, but the law nevertheless prohibits termination for a “bad cause”, which is any reason that violates the statutes, Constitution or public policy of Arizona, as explained in 8. Disputes.

The concept of employment at will, which allows either party to end the employment relationship at any time and for any reason not prohibited by law, is a matter of avoiding risk of liability and expenses of litigation for employers. The statute and court decisions that uphold the right of employers to terminate an employee for “no cause” is a legal consideration, but as a practical matter terminations without cause do not occur. 

There is always a reason that employers terminate employees. Employers do not decide that because they have at-will employees they may terminate an employee for no reason. Employment at will is a matter of the employer avoiding having to defend itself in court by providing evidence of the poor performance or misconduct of the employee, or the financial circumstances that caused the business to reduce the number of its employees. However, employers should always have and preserve evidence of the reasons for termination, as courts may presume that the reason for a termination was unlawful discrimination if the employer cannot articulate a legitimate, non-discriminatory reason for termination, or if the employer proffers a pretextual reason. See McDonnell Douglas Corp v Green, 411 US 792 (1973), and its progeny. 

Although employment at will means that either party may terminate the employment at any time, it is not enforceable for employers to compel an employee to continue to work for the balance of the duration of an employment term. Specific performance is not available as a remedy for breach of a personal services contract by an employee. Employers can recover monetary damages for an employee quitting before the end of the contract term, potentially including a loss of profits, recruiting or training costs, etc. An injunction to prohibit the employee from working elsewhere during the term of employment may be a remedy. 

No notice periods are required to terminate employees. Arizona does have a unique law that includes a notice period, but it applies for notice by the employee, not the employer. 

If an employer has voluntarily given employees notice of the Arizona Constructive Discharge Act, the employee must give the employer 15 days’ written notice if the employee contends that their working conditions are intolerable and will constitute a constructive discharge, subject to exceptions described below. See Arizona Revised Statutes Section 23-1502. 

The law requires the employee to consider any response by the employer to the employee’s notice before the employee decides whether to resign, if the employee is to preserve the right to contend that the working conditions were intolerable and gave the employee no alternative but to resign. 

There are exceptions to the notice requirement to preserve constructive discharge claims. If the employer committed “outrageous conduct”, such as “sexual assault”, “threats of violence” or a “continuous pattern of harassment by the employer or a managing agent of the employer”, the employee does not need to give notice of intolerable working conditions before resigning and being able to bring a constructive discharge claim. See Arizona Revised Statutes Section 23-1502(A)(2).

Most commercially prepared employment posters in Arizona automatically contain the notice to employees of the constructive discharge law and the law’s notice requirement by posting such notices or including notice of the constructive discharge law in an employment handbook, where the employer opts in to coverage of the statute.

Arizona law does not contain provisions that make distinctions between summary dismissals or serious cause for termination. The distinction is what constitutes “bad cause” for termination, as explained in 8. Disputes.

As a practical matter, it is usually considered more serious for an employee to have engaged in misconduct – such as dishonesty, theft, disloyalty, insubordination, etc – as distinguished from merely being not as efficient, falling short of productivity standards, or having some attendance issues. Experience in litigation generally teaches employers that it is usually preferable to terminate employees for misconduct than for sub-standard performance. Juries are more likely to accept that it was good cause to terminate an employee who has lied, cheated, stolen or been disloyal than considering it justified for employers to have terminated an employee because the employee’s job performance fell short of the employer’s expectations.

Arizona law does not contain specific requirements for termination agreements and releases to be enforceable. General common law principles applicable to all contracts apply. For example, the agreement must be supported by consideration, so a release in exchange for a final pay check is unenforceable because the employee is only receiving compensation that they were already entitled to receive. Similarly, the contract must be written in a manner understandable to the employee, and the employee must have a reasonable time to consider the agreement.   

Employees who have raised issues regarding the compliance with legal requirements applicable to the employer may acquire the protection of being a “whistle-blower” and may allege that adverse actions taken against them by the employer were unlawful retaliation. There are about 40 federal and state laws that protect employees from retaliation for raising compliance issues.

Under the Arizona Employment Protection Act, whistle-blowing employees have protection against retaliation only regarding state law compliance issues, not federal law compliance matters. The law does extend the protections for employees who raise issues internally within the employer’s procedures, even if they have not contacted any government agency. See Arizona Revised Statutes Section 23-1501(A)(3)(c)(ii). That encourages employees to communicate about compliance issues internally first rather than going straight to a government agency. 

The Arizona Minimum Wage Act provides special protections for employees who have asserted their rights to be paid the minimum wage. The law provides that if an employer terminates an employee within 90 days of the employee seeking minimum wage payments, the law will assume that the termination was in retaliation for the employee exercising rights under the statute, and employers must disprove that assumption by clear and convincing evidence. See Arizona Revised Statutes Section 23-364(B). 

The 1996 Arizona Employment Protection Act, Arizona Revised Statutes Section 23-1501, defined and limited the grounds for wrongful termination claims. Employees may bring claims for wrongful termination under the following circumstances.

• Breach of contract, if the contract is in writing, signed by the employer, and the contract supersedes the presumption that employment is at will. Typical contractual terms that supersede at-will employment are guarantees of employment for a specific duration, specification or restrictions of the grounds for termination, or requirements for certain procedures before termination, such as notice of cause and an opportunity to cure.
• Wrongful termination in violation of an Arizona statute, such as anti-discrimination laws. If the statute provides for a remedy to the employee for a violation of the statute, the remedy is exclusive and the employee cannot maintain a claim for wrongful termination in violation of the public policy contained in the statute. 
• Wrongful termination in violation of the public policy contained in the Arizona Constitution or in an Arizona statute that does not provide a remedy to the employee for a violation of the statute.

An example of a wrongful termination claim in violation of public policy would be terminating an employee in retaliation for refusing to commit a crime, for whistle-blowing to the employer or to a government agency about the employer’s violation, or for filing a workers compensation claim.

The damages for the first type of wrongful termination claims – breach of contract – are the economic damages the employee has experienced from the loss of employment, plus reasonable attorneys’ fees awardable in contract lawsuits under Arizona Revised Statute Section 12-341.01. 

The damages for the second type of wrongful termination claims, filed under Arizona statutes, are whatever the statute provides, as explained for anti-discrimination laws in 8.2 Anti-Discrimination. This means that when the Arizona Legislature has enacted a law that prohibits terminations for particular reasons, such as the Arizona Civil Rights Act, employees can sue to recover only the limited damages that are specified in such a statute, but cannot “piggy-back” a common law tort claim for wrongful termination in violation of the public policy contained in the underlying statute and seek higher damages under the tort claim.

The third type of a wrongful termination claim, in violation of an Arizona public policy contained in a statute that does not provide for a remedy to the employee, is a tort claim, with the damages being the loss of income, potentially compensatory damages for pain, suffering, emotional distress, etc, and possibly punitive damages. A recovery of attorneys’ fees is generally not available, unless the claim also arises out of a contract.

The Arizona Civil Rights Act was patterned after the federal Civil Rights Act of 1964 and the Americans with Disabilities Act. See Higdon v Evergreen Int'l Airlines Inc, 138 Ariz 163, 165 n3 (1983). Therefore, interpretations of the federal law are generally persuasive in providing guidance to Arizona Courts, except for some differences noted below. See Francini v Phx Newspapers, 188 Ariz 576, 582 (Ct App 1996).

Arizona prohibits discrimination based on age, race, sex, national origin, colour or disability. 

The primary difference between Arizona and federal anti-discrimination laws is that the Arizona Civil Rights Act has not been amended to conform to the federal Civil Rights Act of 1991. The expanded remedies available under federal discrimination claims are therefore not available in claims under the Arizona Civil Rights Act.

Consequently, under the Arizona Civil Rights Act, successful plaintiffs can recover:

• loss of income, or back pay, from the time of the discrimination through the trial;
• reinstatement to the former job;
• in lieu of reinstatement, “front pay”, which is equal to the lower income that the employee will receive in the future until the employee is able to catch up to the level of income that the employee would have received if it had not been for the discrimination; and
• reasonable attorneys’ fees.

However, unlike the remedies available under federal employment discrimination claims due to the federal Civil Rights Amendments of 1991, under Arizona law plaintiffs are not entitled to the following:

• compensatory damages for pain, suffering and emotional distress;
• punitive damages; and
• jury trials (although in Arizona judges may allow advisory juries to deliberate in discrimination cases).

There are caps on the combined amounts of compensatory and punitive damages available under federal law, based on the size of the employer. The upper limit, for employers of 500 or more employees, is USD300,000, with smaller caps for smaller employers, under federal law. Those damages are not available under Arizona law.

Because of the higher damages available under federal law, most lawsuits alleging violations of the Arizona Civil Rights Act also bring claims for discrimination under the federal Civil Rights Act to seek the higher federal damages. As a result, Arizona employers are able to remove those cases to federal court to adjudicate both the Arizona and federal discrimination claims because federal court is generally considered to be a forum that is more advantageous to employers.

An additional difference between Arizona and federal discrimination law is that both statutes apply to employers with 15 or more employees, but the Arizona law also applies to all employers – even small employers with one employee, for purposes of sexual harassment claims only.

There are some procedural differences between the Arizona and federal employment discrimination laws. Under the Arizona Civil Rights Act, employees (or applicants) must file a Charge of Discrimination with the Arizona Civil Rights Division of the Attorney General’s Office within 180 days of the alleged discrimination, and a lawsuit must be filed within one year of filing the Charge. Under federal law, a Charge of Discrimination must be filed with the Equal Employment Opportunity Commission (EEOC) within 300 days of the alleged discrimination. The deadline to file a lawsuit is 90 days after the EEOC has issued its right-to-sue notice, without the one-year deadline that exists under Arizona law.

One anomaly does exist in the types of discrimination prohibited under Arizona law when compared to federal law. In a heavily criticised decision, the US Supreme Court ruled in General Electric Co v Gilbert, 429 US 125 (1976) that pregnancy discrimination is not prohibited as part of sex discrimination. Congress passed the Pregnancy Discrimination Act in 1978 to overrule that 1976 decision, but Arizona has not amended the Arizona Civil Rights Act to add pregnancy to the list of discrimination prohibited by statute. Because the Arizona Civil Rights Act was patterned after the pre-1978 federal Civil Rights Act, and the federal Civil Rights Act before 1978 did not prohibit discrimination on the basis of pregnancy, technically pregnancy discrimination is not prohibited under Arizona law. It has been illegal under federal law since 1978.

It is increasingly common for government agencies and courts to hold proceedings via videoconferencing systems. Although trials and lengthy court hearings are done in person, other proceedings in cases – including depositions, mediations and routine court hearings – are typically done via videoconferencing.

There are a few specialised employment forums at the administrative agency stage, but not in court. Charges of Discrimination are investigated by the Arizona Civil Rights Division of the Attorney General’s Office. 

Employees have the option to file complaints about unpaid wages or sick leave violations with the Industrial Commission of Arizona. The decisions of those agencies are not final, however, and recourse to the Superior Court can follow the administrative proceeding.

If a disgruntled ex-employee threatens to commit an act of violence or harasses an employer, the employer may seek an injunction against workplace harassment in either the Superior Court, Justice Court or municipal courts.

Class action claims are available, and Arizona class action procedures follow the procedures used under federal law.

One difference between Arizona and federal wage-and-hour laws is that under the federal Fair Labor Standards Act claimants can bring claims in a collective action on behalf of a group of employees, utilising standards that are more permissive than class action procedures. Under Arizona law, there is no provision for collective actions, and typical class action procedures apply.

Arizona has an approved state plan for administration of occupational safety and health (OSHA). Federal OSHA jurisdiction in Arizona is limited to military bases and tribal lands. All other OSHA enforcement is by the Arizona Division of Occupational Safety and Health of the Industrial Commission of Arizona. If OSHA citations are contested and a hearing is required, the hearing will be conducted by the Office of Administrative Hearings, subject to an appeal to the Arizona Occupational Safety and Health Review Commission, and then to the Arizona Court of Appeals.

Pre-dispute arbitration agreements are enforceable, although the Arizona Arbitration Act excludes employment claims from being subject to its provisions. Therefore, the arbitrability of employment claims is based on contract law principles and the Federal Arbitration Act.

Under Arizona law, the prevailing party in lawsuits with claims that arise out of contract can recover their reasonable attorneys’ fees and costs, determined by the judge, not by a jury. 

Prevailing plaintiffs in most employment claims are entitled to recover their attorneys’ fees and costs for discrimination claims, wage claims, etc. Prevailing employers are not entitled to recover their fees unless the plaintiff’s claims were frivolous.

If the Arizona Civil Rights Division brings discrimination claims, it is not entitled to recover its fees.