The Fair Labor Standards Act and Arizona law establish minimum wage standards, overtime pay provisions, child labor protections, and record-keeping requirements for most private sector and government employers.
As a general rule, employers are legally required to pay employees wages in accordance with the work they perform. However, there are circumstances in which an employer may delay, reduce, or refuse to pay employees. In this article, we’ll discuss five considerations for Arizona employers when it comes to wage withholding.
Pay Timing and Deadlines
In Arizona, the standard rule is that employers must pay wages at least two times a month and paydays cannot be more than 16 days apart or more than 5 days after the end of the pay period. However, businesses whose payroll system is centralized outside Arizona are able to set paydays 10 days after the end of the pay period (AZ Rev. Stat. Sec. 23-351).
Special Exceptions:
– Administrative, executive, and professional employees, outside salespeople, and supervisory employees who work for companies whose payroll system is centralized outside Arizona may be paid monthly.
– School employees may choose whether to have their annual salaries prorated or paid in the weeks actually worked. They can have payments due at the end of the year paid in a lump sum or paid within a period of 2 months after the close of the fiscal year (AZ Rev. Stat. Sec. 23-351).
Additionally, different standards apply if:
– The employee no longer works for the employer.
– The employer chooses to terminate or lay off the employee. In this case, the remaining wages must be paid within seven business days or by the end of the next regular pay period, whichever is sooner.
– The employee resigned. Here, the payment is not due until the next regular payday for the pay period in which the employee resigned.
Exempt vs. Non-Exempt Employees
All employees are entitled to minimum wage. However, different standards apply to depending on an employee’s status, exempt or non-exempt, as is relates to overtime.
Non-exempt employees (employees who do not receive a standardized, defined salary) who work over forty hours a week are entitled to overtime wages under both state and federal law.
Unfortunately, employers frequently misclassify employees. Thus, an employee classified as exempt may actually qualify as a non-exempt employee under rule of law.
Employers May Withhold Wages in Certain Circumstances
Arizona law only provides three circumstances under which an employer may withhold an employee’s wages:
– The employer is permitted to withhold wages under state or federal law;
– The employee previously provided a written authorization to withhold wages; and/or
– 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.
If none of these circumstances apply, an employer that fails to pay wages in a timely manner will be liable for back pay.
Employees May Seek Legal Action for Unpaid Wages
For claims of $5,000 or less, an employee may file a claim with the Arizona Industrial Commission.
Employees owed more than $5,000.00 in unpaid wages can file a claim with the U.S. Department of Labor, Wage and Hour Division or they can bring a regular civil suit in an Arizona Court.
Common allegations by employees bringing a lawsuit for unpaid wages include the employers’ failure to:
– Pay for employee wages for the time spent in company meetings
– Pay for employee training sessions
– Correctly account for hours worked
– Provide compensation for time worked at home or after hours for the benefit of the company
– Provide compensation for travel time between work sites.
Typically, an employee has one year from the date of the missed wage to file a claim. As such regular audits of your payment system can help you catch and remedy any discrepancies early on. Additionally, a good accounting of payroll and employee time work will allow you to dispute any wage claims that may come against you.
Remedies For Failure to Pay Wages
If an employer is found to have failed to pay an employee, whether by accident or in bad faith, the employee may be entitled to double or even triple back pay for up to three years plus attorney’s fees and costs.
As such, it is important to work with an attorney and/or HR professional to determine the exemption status for each person you employ.
Complying with the Fair Labor Standards Act (FLSA) can be a challenge for any employer. It’s a good idea to work with a knowledgeable HR professional and attorney, licensed in your state, as many rules are state specific. Some things to discuss regularly are:
– Changes in state and FLSA regulations and new court rulings
– Federal and state wage and hour requirements
– How prepared your business is for a DOL audit or investigation
– Understanding and compliance with exceptions
– Streamline HR and payroll procedures
– Review of your payroll and HR forms
Contact Counxel Legal Firm
If you would like to talk to an attorney about employer pay obligations, contact us at (480) 744-6621 or at request@counxel.com. Don’t forget to check out the good things that others are saying about the services they received from Timothy Coons on Google.
This article is intended for informational purposes only and does not constitute legal advice for your specific situation. Use of and access to this article does not create an attorney-client relationship between you and Counxel Legal Firm. Please contact request@counxel.com or (480) 744-6621 to request specific information for your situation.
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