Arizona sees moderate minimum wage increase while Flagstaff’s rate leaps $2 higher

In 2016, Arizona voters passed the Arizona Fair Wages and Healthy Families Act (also known as Proposition 206). The Act provided for locked-in minimum wage increases each year. Consequently, employers have seen the rate go up from $8.05 per hour (2016) to $12 in 2020. The step increases outlined in the Act ended this year, but the rate will still go up slightly—to $12.15—on January 1, 2021.

Increases now based on CPI

Going forward, the paid sick time statute requires the Arizona Industrial Commission to review the Consumer Price Index (CPI) over the previous 12 months through August to determine whether and to what extent the minimum wage should be raised. An increase for the following January is based on inflationary changes and rounded to the nearest 5-cent increment.

The commission recently announced the modest 15-cent increase to Arizona’s minimum wage for 2021 based on a 1.3% rise in the CPI measured in August. The commission will adjust the state’s minimum wage similarly in future years, barring any change to the state law. You should check each year to ensure you’re keeping up with any changes to the wage rate.

Flagstaff employers make way for larger increase

In the same 2016 election, Flagstaff voters passed a Minimum Wage Act (MWA) (or Proposition 414 on the city ballot). The MWA called for even greater increases to the rate for those employed in the city, with a similar step-by-step approach.