On November 8, 2016, Arizona voters passed the Minimum Wage and Paid Sick Time Off Initiative (Proposition 206), which will increase the state's minimum wage to $10.00 in January 1, 2017 Thereafter, the minimum wage will be raised to $10.50 effective January 1, 2018, $11.00 effective January 1, 2019, and $12.00 per hour effective January 1, 2020. Beginning in 2021, the minimum wage will continue to be adjusted annually based on Arizona’s cost of living. Employers with employees who customarily and regularly receive tips as part of their income may continue to pay employees $3.00 less than the minimum wage in accordance with Arizona’s minimum wage act if the employer can prove the employee is earning at or beyond the minimum wage after tips are counted.
Arizona Proposition 206 – also known as the Minimum Wage and Paid Time Off Initiative – will be on the November 8th ballot.
Currently, the Arizona minimum wage is $8.05 while the federal minimum wage is $7.25. In 2006, Arizona voters approved Proposition 202 (also known as the Arizona Minimum Wage Act), which provides for annual adjustments based on the cost-of-living.