On November 2, 2021, voters in Tucson, Arizona, passed Proposition 206 (officially titled the Tucson Minimum Wage Act (TMWA)). This new city ordinance increases the minimum wage for virtually all employees working within the city limits to $13.00 per hour, effective April 1, 2022. (Arizona’s minimum wage currently is $12.80 per hour.) But there is more to the Tucson ordinance than just a pay increase for minimum wage workers. The ordinance also creates a host of other employer requirements unrelated to the minimum wage that substantially affects the employer-employee relationship.
After the initial minimum wage bump on April 1, the TMWA increases the Tucson minimum wage rate as follows:
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$13.50 on January 1, 2023
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$14.25 on January 1, 2024
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$15.00 on January 1, 2025
On January 1, 2026, and each January thereafter, the TMWA increases the minimum wage rate based on the rate of inflation. Per the TMWA, the new rate will be determined by the percentage rate of inflation multiplied by the minimum wage on December 31 of the previous year, rounded to the nearest multiple of five cents ($0.05).
The TMWA also created new requirements and restrictions that affect many more workers employed “within the geographic boundaries of the city” than just those earning a minimum wage. Here is a summary of those key changes.
“Worker for Hire” Minimum Wage
The TMWA adopts the worker-friendly “ABC test” for determining whether a worker is entitled to earn at least the TMWA minimum wage. To accomplish this, the ordinance uniquely creates a new category of workers called “workers for hire,” who are entitled to receive the same minimum wage as “employees.” A “worker for hire” is any individual who is not an employee or a “qualified marketplace contractor” and works at least five hours in a workweek, unless the hiring entity can show: (1) “the individual is free from the control and direction of the hiring entity in connection with the performance of the work; (2) the individual performs work that is outside the usual course of the hiring entity’s business; and (3) the individual is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed for the hiring entity.”
Pay Card Restrictions
The TMWA prohibits employers from requiring “an employee to receive minimum wage payments using a pay card, reloadable debit card, or similar method that requires the employee to possess a valid Social Security number.” This requirement contradicts the Arizona Wage Act (AWA), which expressly permits employers to pay with a pay card any employees who fail or refuse to accept wages by direct deposit (the AWA does not prohibit pay cards that require valid Social Security numbers).
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