Arizona tip laws (2026)
Arizona's minimum wage is $15.15 an hour, and employers can take up to a $3.00 tip credit, so the tipped cash wage is $12.15. The state rate rises to $15.65 on January 1, 2027. Flagstaff pays $18.35 with no tip credit at all.
Arizona at a glance
Tip credit allowedArizona: $15.15 an hour minimum wage. Tipped staff can be paid $12.15 cash, with up to $3.00 counted from tips.
| State minimum wage | $15.15/hr | Statewide from .[1] |
|---|---|---|
| Tipped cash wage | $12.15 | Plus up to $3.00 in tips = $15.15.[2] |
| Max tip credit | $3.00 | Counted from tips.[3] |
| Tip pooling | Allowed | Mandatory pools allowed.[4] |
| Card-fee deduction | Pro rata only | Only the tip's share of the fee, under federal rules.[5] |
| Card tip payout | Card tips are due by the regular payday under federal law. | Arizona counts tips in the week earned.[5][6] |
| Local minimum wages | 2 places | Local rates on file. See all[7] |
Rates verified against the Industrial Commission of Arizona, Labor Department on . Rates as of . Tipped totals are worked out from the rates above. Download this data (CSV)
02The yes/no sheet
Can you do this in Arizona?
In Arizona you can take a tip credit of up to $3.00 an hour, can require staff to join a tip pool and can take out only the tip's share of a card fee. Each answer below carries its condition and an official source.
| Number | Can you… | Answer | The condition |
|---|---|---|---|
| 01 | Take a tip credit against minimum wage? | Yes | Pay at least $12.15 cash and count up to $3.00 in tips. Tips must cover the gap.[2][3] |
| 02 | Make staff join a tip pool? | Yes | Required sharing is allowed, but non-tipped workers can't count shared tips toward their state minimum. Federal manager limits still apply.[4] |
| 03 | Include bartenders, bussers, runners and hosts? | Depends | Bartender, busser, food runner and host: a credit pool needs a customarily tipped job. Pools without a credit follow federal rules, and workers must actually keep their share.[4][5] |
| 04 | Include cooks and dishwashers? | Depends | Tips that cooks or other non-tipped workers get can't count toward their own state minimum. Federally, a pool with cooks needs full cash minimum wage.[4][5] |
| 05 | Give managers or supervisors a share? | No | Managers and supervisors can't keep workers' tips or take pool shares. They keep only tips for service they alone provide.[5] |
| 06 | Let an owner keep any of the tips? | No | An owner with 20% or more equity who actively manages counts as a manager. No employer may keep workers' tips.[5] |
| 07 | Pick your own split (hours, points or percentages)? | Depends | The employer can require pooling. The credit rests on what each worker actually keeps. Federal notice and eligibility rules also apply.[4][5] |
| 08 | Take card processing fees out of tips? | Pro rata (federal) | Federal rule: only the actual proportional credit-card transaction fee may be deducted from charged tips; no deduction exceeding that fee or reducing required minimum wages; state law may forbid even that deduction.[5] |
| 09 | Hold card tips until payday? | Deadline | Card tips are due by the regular payday under federal law. Arizona counts tips in the week earned.[5][6] |
| 10 | Cover walkouts, breakage or register shortages from tips? | No | Not from tips.[5] |
| 11 | Keep a mandatory service charge for the house? | Depends | A mandatory service charge counts toward Arizona minimum wage only if paid out in the pay period earned. Federally it's wages, not a tip.[4][5] |
| 12 | Pay tips on a payroll card? | Depends | Allowed after direct deposit is offered. Federal choice and alternative rules still apply. Offer another way to get paid too.[6][9][10] |
03State vs federal
Arizona vs federal law
Arizona sets a stricter rule than federal law on 3 of the 10 rules below, starting with a $15.15 minimum wage against the federal $7.25. Where the two differ, the rule that is better for the worker applies.
| Rule | Federal (FLSA) | Arizona | Comparison |
|---|---|---|---|
| Minimum wageStricter | Federal$7.25[5] | Arizona$15.15[1] | Stricter |
| Tipped cash wageStricter | Federal$2.13[5] | Arizona$12.15[2] | Stricter |
| Max tip creditStricter | Federal$5.12[5] | Arizona$3.00[3] | Stricter |
| Who counts as tippedState rule | FederalMore than $30 a month in tips, customarily and regularly received in the occupation.[5] | ArizonaMust customarily and regularly get tips. Arizona sets no monthly dollar test. The federal more-than-$30 test applies to the federal credit.[2][3][5] | State rule |
| Managers in the poolState rule | FederalManagers/supervisors meeting the executive duties test cannot keep employees’ tips or receive from pools; they may keep only tips received directly for services they directly and solely provide. No salary-level test is used for this tip restriction.[5] | ArizonaManagers and supervisors can't keep workers' tips or take pool shares. They keep only tips for service they alone provide.[5] | State rule |
| Kitchen in the poolState rule | FederalCooks and dishwashers may join a nontraditional mandatory pool only when all workers receive a direct cash wage of at least the full federal minimum wage and no tip credit is taken; employer/managers/supervisors remain excluded. State law may be stricter.[5] | ArizonaTips that cooks or other non-tipped workers get can't count toward their own state minimum. Federally, a pool with cooks needs full cash minimum wage.[4][5] | State rule |
| Card fees from tipsFederal applies | FederalOnly the actual proportional credit-card transaction fee may be deducted from charged tips; no deduction exceeding that fee or reducing required minimum wages; state law may forbid even that deduction.[5] | ArizonaFederal rule applies.[5][4][11] | Federal applies |
| Card tip payoutState rule | FederalCharged tips due by regular payday, without waiting for processor reimbursement. Employer-administered pools fully distributed by regular payday for the workweek/pay period; if the amount/distribution cannot be determined before payroll, distribute as soon as practicable afterward.[5] | ArizonaCard tips are due by the regular payday under federal law. Arizona counts tips in the week earned.[5][6] | State rule |
| Mandatory service chargesState rule | FederalA compulsory service charge is not an FLSA tip. Amounts distributed to employees are wages that may satisfy wage obligations and must enter the regular rate for overtime. This federal wage classification does not decide contractual or state-law ownership.[5] | ArizonaA mandatory service charge counts toward Arizona minimum wage only if paid out in the pay period earned. Federally it's wages, not a tip.[4][5] | State rule |
| Overtime for tipped staffState rule | FederalFor covered nonexempt employees, overtime generally begins after 40 hours in a workweek. Use the full regular rate, at least the full federal minimum wage, not $2.13; the hourly tip credit is not increased for overtime. Voluntary tips above the tip credit are excluded; distributed service charges enter the regular rate.[5] | ArizonaOvertime after 40 hours a week on the full regular rate. The tip credit doesn't grow for overtime. Paid-out service charges count; extra tips don't.[5] | State rule |
Every state starts from the same federal floor. Federal tip law baseline: the FLSA rules, rates and sources, and how Arizona fits among the four tip credit classes.
04Wages
Minimum wage and the tip credit in Arizona
In Arizona employers can pay tipped staff $12.15 an hour and count up to $3.00 in tips toward the $15.15 minimum. If tips fall short, the employer makes up the difference.[2]
One server, one slow 30-hour week in Arizona
A busy week with $90.00 or more in tips needs no top-up. Every tip above that is the server's. Fictional worker and tips.
- Tip credit conditions
- Tips the worker actually keeps must cover the gap every week. Charged-tip and FICA records prove it. Written notice before and each pay period.[3][4]
- Who counts as tipped
- Must customarily and regularly get tips. Arizona sets no monthly dollar test. The federal more-than-$30 test applies to the federal credit.[2][3][5]
- Overtime
- Overtime after 40 hours a week on the full regular rate. The tip credit doesn't grow for overtime. Paid-out service charges count; extra tips don't.[5]
05Local rates
City and county minimum wages in Arizona
2 cities and counties in Arizona set their own minimum wage, from $15.45 in Tucson to $18.35 in Flagstaff. A restaurant inside one of them pays the local rate, not the $15.15 state rate.[7]
| City or county | Rate | vs state $15.15 | Tipped cash wage | Effective |
|---|---|---|---|---|
| FlagstaffCovers workers expected to work 25 or more hours a year in the city. No tip credit.[15] | $18.35 | +$3.20 over state | $18.35 | Next change $18.95 on |
| TucsonCovers work of at least 5 hours per pay cycle. Tucson sets the tipped cash wage by formula, not as a published dollar figure.[9] | $15.45 | +$0.30 over state | See note | Next change $16.00 on |
06Tip pool
Who can be in the tip pool in Arizona
Arizona allows tip pools, and employers can make them mandatory. Owners, managers and supervisors can't share in them. A tip pool collects tips and splits them among staff; a tip-out is one worker handing part of their tips to others.
| Role | Can share? | Condition |
|---|---|---|
| Front of house | ||
| Server | Depends | A credit pool needs a customarily tipped job. Pools without a credit follow federal rules, and workers must actually keep their share.[4][5] |
| Bartender | Depends | A credit pool needs a customarily tipped job. Pools without a credit follow federal rules, and workers must actually keep their share.[4][5] |
| Busser | Depends | A credit pool needs a customarily tipped job. Pools without a credit follow federal rules, and workers must actually keep their share.[4][5] |
| Food runner | Depends | A credit pool needs a customarily tipped job. Pools without a credit follow federal rules, and workers must actually keep their share.[4][5] |
| Host | Depends | A credit pool needs a customarily tipped job. Pools without a credit follow federal rules, and workers must actually keep their share.[4][5] |
| Barback | Depends | A credit pool needs a customarily tipped job. Pools without a credit follow federal rules, and workers must actually keep their share.[4][5] |
| Expo | Depends | A credit pool needs a customarily tipped job. Pools without a credit follow federal rules, and workers must actually keep their share.[4][5] |
| Back of house | ||
| Cook | Depends | Tips they get can't count toward their state minimum wage. Federal pool rules and manager limits apply separately.[4][5] |
| Dishwasher | Depends | Tips they get can't count toward their state minimum wage. Federal pool rules and manager limits apply separately.[4][5] |
| Leadership | ||
| Shift lead | Depends | A credit pool needs a customarily tipped job. Pools without a credit follow federal rules, and workers must actually keep their share.[4][5] |
| Manager or supervisor | Not allowed | Cannot receive employees’ pooled tips. Actual ownership and management duties determine the restriction.[5] |
| Owner | Not allowed | Cannot receive employees’ pooled tips. Actual ownership and management duties determine the restriction.[5] |
- Managers and supervisors
- Managers and supervisors can't keep workers' tips or take pool shares. They keep only tips for service they alone provide.[5]
- Owners
- An owner with 20% or more equity who actively manages counts as a manager. No employer may keep workers' tips.[5]
- Back of house
- Tips that cooks or other non-tipped workers get can't count toward their own state minimum. Federally, a pool with cooks needs full cash minimum wage.[4][5]
- Who sets the percentages
- The employer can require pooling. The credit rests on what each worker actually keeps. Federal notice and eligibility rules also apply.[4][5]
- Cap on what a pool can take
- No state rule. Federal rule applies: no federal percentage or amount cap for a valid mandatory pool; eligibility, notice and minimum wage rules still apply.[5][4]
- Pooling allowed
- Yes. Pooling is allowed. The credit applies only to tips each worker actually keeps.[4]
07Put it to work
Setting up a tip pool in Arizona
Under Arizona rules, 6 of the 10 staff in this example can share a $1,200 pool. The table splits the same pool by percentage, by points and by hours.
| Who | By % | By points | By hours |
|---|---|---|---|
| Maya | $268.29 | $250.00 | $211.78 |
| Jordan | $268.29 | $250.00 | $211.76 |
| Priya | $268.29 | $250.00 | $211.76 |
| Sam | $175.61 | $200.00 | $211.76 |
| Luis | $109.76 | $125.00 | $176.47 |
| Ava | $109.76 | $125.00 | $176.47 |
| Theo | Not in the pool. Out here: this pool includes servers paid with a tip credit. | ||
| Kim | Not in the pool. Out here: this pool includes servers paid with a tip credit. | ||
| Rafa | Not in the pool. Out here: this pool includes servers paid with a tip credit. | ||
| Dana | Not in the pool. Cannot receive employees’ pooled tips. | ||
| Total | $1,200.00 | $1,200.00 | $1,200.00 |
Fictional restaurant and staff. The guest-facing staff here are assumed to meet Arizona's condition for sharing (see who can be in the tip pool, above). Percentages and point weights are examples, not a recommendation. Shares are rounded to the cent, and any leftover cent goes to the first server. Run your own numbers in the tip pooling calculator.
Ferry Tip Manager: support pool split by hours
Servers and bartenders pay into the support pool, and Tip Manager splits it by hours worked. Each person sees their share, with no spreadsheet at close.
Who it's for Full-service restaurants that tip out bussers, runners and bar backs
08Service charges
Service charges vs tips in Arizona
In Arizona whether a mandatory service charge counts as a tip depends on the facts. A mandatory service charge counts toward Arizona minimum wage only if paid out in the pay period earned.
| Question | OptionalTip | MandatoryService charge |
|---|---|---|
| Who sets the amount | The guest | The business |
| Who it belongs to | The worker it was left for, or the pool | A mandatory service charge counts toward Arizona minimum wage only if paid out in the pay period earned. Federally it's wages, not a tip.[4][5] |
| Can it go to staff? | Yes, through the pool | Yes. Amounts paid to staff are wages, not tips.[5] |
| How it's taxed (federal) | Tip income the worker reports | Regular wages, with payroll taxes[18][19] |
| Guest notice | None needed | Arizona consumer-fraud law prohibits deceptive material omissions. The Attorney General says restaurant add-on charges must be disclosed on menus; the cited consent judgment directly binds its named restaurants, without prescribing a universal statewide font or exact wording.[16][17] |
- Step 1Did the guest choose whether to pay it, and how much?YesIt's a tip. It belongs to staff.NoIt's a mandatory charge. Go to step 2.
- Step 2What does Arizona say?Depends on the factsA mandatory service charge counts toward Arizona minimum wage only if paid out in the pay period earned. Federally it's wages, not a tip.[4][5]
- Step 3Check the cityNo city service charge rules on file for Arizona.
- Menu and receipt notice
- Arizona consumer-fraud law prohibits deceptive material omissions. The Attorney General says restaurant add-on charges must be disclosed on menus; the cited consent judgment directly binds its named restaurants, without prescribing a universal statewide font or exact wording.[16][17]
- Large-party auto gratuities
- An automatic gratuity counts toward Arizona minimum wage only if paid out in the pay period earned. Federally it's wages and counts for overtime.[4][18][19]
Local service charge rules
No local service charge rules on file for Arizona.
More on the difference: service charge vs tip.
09Card tips
Card tips in Arizona: fees and payout timing
In Arizona only the tip's share of the card processing fee can come out of a card tip, under federal rules. Payout deadline: card tips are due by the regular payday under federal law. Arizona counts tips in the week earned.
Federal law allows only the actual card fee on the tip. Arizona has no explicit card-fee rule and limits wage withholding.[5][4][11]
When card tips have to land
- TonightGuest adds a tip On the card, at the table.
- CloseShift is tallied The pool is split by your rules.
- DeadlineArizona rule Card tips are due by the regular payday under federal law. Arizona counts tips in the week earned.[5][6]
- Last dayFinal pay Fired: within 7 working days or the end of the next pay period, whichever comes first. Quit: next regular payday.[20]
Paydays: At least twice a month, on fixed paydays no more than 16 days apart. Some exceptions apply.[6]
Paying tips on a payroll card
- Allowed?DependsAllowed after direct deposit is offered. Federal choice and alternative rules still apply.[6][9]
- Worker consent needed?DependsState allows a card when the worker doesn't pick a bank. Federal law bars making the card the only option.[6][10]
- Free way to get the money?State ruleOne free withdrawal per wage deposit, no more than weekly. The employer must disclose every card fee.[6]
- Must you offer another option?YesFederal rule: at least one other way to get paid.[6][10]
- Holding cash tipsState ruleTips used for the credit must belong to the worker, free of employer control except a lawful pool. No separate cash-tip deadline found.[4][5]
- Tips shown on the pay stubYesThe hourly tip credit must be stated in writing each pay period. A full pool breakdown isn't necessarily required.[4][6]
Ferry Pay: each tip share, paid out digitally
Each person's direct tips, tip outs and payable amount in one view, then paid through Ferry Pay. No cash to keep on hand for payouts. Eligibility and fees apply.
Who it's for Operators who want to stop the nightly cash run
“Since launching this card program, we've reduced our cash-carrying costs by over 66 percent”
10Records
Records and notices in Arizona
Keep each tipped worker's tips and hours on record, shift by shift. Arizona: four years for state payroll records.
Arizona State
- Tip records Keep daily hours, wages and earned sick time. Charged-tip and FICA records back up the credit. Workers can see and copy their records.[7][3]
- How long to keep them Four years for state payroll records.[7]
- Tip credit notice Required. Written notice before the credit starts, then the hourly credit amount in writing every pay period.[4]
- Posters and forms ICA minimum-wage poster conspicuously accessible; small-employer rule exemption applies; Written advance tip-credit notice and each-pay-period credit amount.[7][4]
Everywhere Federal
- Tip records Maintain employee identity, time and pay records. Tip-credit employers additionally retain tipped employee, reported tips, credit amounts and hours/earnings by tipped and nontipped occupation. No-tip-credit employers operating mandatory pools record each recipient and weekly/monthly tips. IRS daily records/reporting are separate obligations.[5]
- How long to keep them FLSA: payroll records at least three years; underlying wage-computation records two years. Tax retention is separate.[21]
- Tip credit notice Oral or written notice must state cash wage; tip credit amount; credit cannot exceed actual tips; employee retains tips except valid traditional pool; credit unavailable until informed. Traditional pool contribution amounts also disclosed.[5]
- A written pool policy Good practice, not a federal rule: who's in, how it splits, when it pays. Share it with staff. How to write one.
Think your tips were handled wrong in Arizona?
Workers in Arizona can file a tip or wage claim with the Industrial Commission of Arizona, Labor Department (602-542-4661). Filing is free, and this page can't settle a dispute; the state can.[8]
- Phone
- 602-542-4661[8]
- Website
- azica.gov/labor-department
Retaliation: No retaliation for claims, helping others or sharing rights. Action within 90 days is presumed retaliation. Compensation is at least $150 a day.[7]
Penalties: Underpaid minimum wage: back pay, interest and twice the amount owed on top. Record or poster violations: at least $250, then $1,000.[7]
Can they take this out of my tips?
- Walkouts and dine-and-dashNot allowedEmployee tips cannot reimburse employer losses. Separate wage-deduction rules may also apply.[5]
- BreakageNot allowedEmployee tips cannot reimburse employer losses. Separate wage-deduction rules may also apply.[5]
- Register shortagesNot allowedEmployee tips cannot reimburse employer losses. Separate wage-deduction rules may also apply.[5]
- UniformsNot allowedEmployee tips cannot pay employer uniform costs. Separate wage-deduction rules may also apply.[5]
- Card processing feesAllowedOnly actual proportional card-processing fee; cannot reduce required wages; stricter state rules may apply.[5]
- A manager's shareNot allowedEmployers, managers and supervisors cannot receive employee tip-pool shares.[5]
11Law changes
What changed in Arizona tip law, and what's coming
Next scheduled change: the Arizona minimum wage goes to $15.65 on . Most recent change: The general minimum rose to $15.15. The state tip credit stays up to $3.00 ().
Bills and ballot measures
Nothing pending as of .
Key statutes
- A.R.S. 23-363, minimum wage and tip credit
- A.R.S. 23-364, enforcement/records/local authority
- R 20-5-1206–1207, pooling/credit/notice
- A.R.S. 23-351–353, paydays/cards/withholding/final pay
- Tucson Minimum Wage Act; city current/future minimum, tip-credit cap and payroll-card restrictions
12FAQ
Arizona tip law questions
Plain answers to the 8 questions restaurant owners and staff ask most about Arizona tip law, each linked to its source.
What is Arizona's tipped minimum wage?
What changes on January 1, 2027?
The statewide minimum rises to $15.65 an hour, per the state's official 2027 poster.[8]
Does the tip credit need written notice?
Yes. Written notice comes before the employer first takes the credit. After that, the hourly credit amount goes in writing every pay period.[4]
Can a restaurant require a tip pool?
Yes. Non-tipped workers in the pool can't count shared tips toward their state minimum, and managers and owners can't take a share.[4]
Do Flagstaff servers get the full minimum before tips?
Yes. Covered Flagstaff workers get the full $18.35 an hour in 2026, tips or not. The city's 2027 rate is $18.95.[15]
Can the tip credit cover cleaning or prep shifts?
Not for hours routinely assigned to a non-tipped job, like maintenance or general prep. State guidance says those hours get no credit.[12]
When is a final paycheck due?
After a firing, within seven working days or the end of the next pay period, whichever comes first. After a quit, by the regular payday.[20]
13Compare
How Arizona compares with nearby states
Arizona borders California, Colorado, Nevada, New Mexico and Utah. California and Colorado pay a higher minimum wage than Arizona's $15.15. Running locations on both sides of a line? Each one follows its own state's rules.
Neighboring states
- California tip laws$16.90 min wage No tip credit No tip credit
- Colorado tip laws$15.16 min wage $12.14 tipped cash wage Above $2.13
- Nevada tip laws$12.00 min wage No tip credit No tip credit
- New Mexico tip laws$12.00 min wage $3.00 tipped cash wage Above $2.13
- Utah tip laws$7.25 min wage $2.13 tipped cash wage $2.13 cash
States with the same rules
Same tip credit class as Arizona: Tip credit, cash wage above federal.
- Florida tip laws$15.00 min wage $11.98 tipped cash wage Also a tip credit with a cash wage above $2.13, and only the tip's share of card fees
- New York tip laws$16.00 min wage $10.70 tipped cash wage Also a tip credit with a cash wage above $2.13, and only the tip's share of card fees
- District of Columbia tip laws$18.40 min wage $10.30 tipped cash wage Also a tip credit with a cash wage above $2.13, and only the tip's share of card fees
- Illinois tip laws$15.00 min wage $9.00 tipped cash wage Also a tip credit with a cash wage above $2.13, and only the tip's share of card fees
- Missouri tip laws$15.00 min wage $7.50 tipped cash wage Also a tip credit with a cash wage above $2.13, and only the tip's share of card fees
- Vermont tip laws$14.42 min wage $7.21 tipped cash wage Also a tip credit with a cash wage above $2.13, and only the tip's share of card fees
The law decides who's in. Ferry runs the split.
See how operators set pool rules in Ferry Tip Manager and pay tips out without a cash run. Bring your own Arizona setup.
14Sources
Sources for Arizona tip laws
Every figure on this page links to one of these 21 sources: 17 for Arizona and 4 for the federal baseline. They are statutes, regulations and government agency pages, each with the date it was checked.
- 1The Fair Wages and Healthy Families Act: 2026 Minimum Wage PosterIndustrial Commission of Arizona · Official source · Checked Pinpoint: poster, p. 1www.azica.gov/sites/default/files/2025-09/2026%20THE%20FAIR%20WAGES%20AND%20HEALTHY%20FAMILIES%20ACT_1.pdf
What the source says
“Effective January 1, 2026, Arizona's Minimum Wage Is: $15.15per hour”
- 2Minimum Wages for Tipped Employees, July 1, 2026U.S. Department of Labor · Official source · Page updated · Checked Pinpoint: Arizona rowwww.dol.gov/agencies/whd/state/minimum-wage/tipped
What the source says
“Arizona $15.15 $3.00 $12.15 Not specified”
- 323-363 - Minimum wageazleg.gov · Official source · Checked Pinpoint: A.R.S. 23-363(C); A.R.S. 23-363(C), weekly minimum safeguardwww.azleg.gov/ars/23/00363.htm
What the source says
“the employer may pay a wage up to $3.00 per hour less than the minimum wage”
“the employee received not less than the minimum wage for all hours worked.”
- 4Arizona Administrative Code, Title 20 Chapter 5, Supplement 26-2Arizona Secretary of State · Official source · Page updated · Checked Pinpoint: R 20-5-1207(B)(2), printed page 80; R 20-5-1207(C), printed page 80apps.azsos.gov/public_services/Title_20/20-05.pdf
What the source says
“Except as provided in R20-5-1206(E), the employee actually receives the tip free of employer control as to how the employee uses the tip and the tip becomes the employee’s property;”
“Upon hiring or assigning an individual to a position that customarily and regularly receives tips, an employer intending to exercise a tip credit shall provide written notice to the employee prior to exercising the tip credit.”
“Thereafter, the employer shall notify the employee in writing each pay period of the amount per hour that the employer takes as a tip credit.”
- 5Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Checked Pinpoint: Tip Credit, paragraph 2; opening paragraph; Typical Problems, Overtime Problems, item 1www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
What the source says
“An employer must pay a tipped worker at least $2.13 per hour under the FLSA.”
“the federal minimum wage, which is currently $7.25 per hour.”
“The maximum tip credit that an employer can currently claim is $5.12 per hour: ($7.25 - $2.13 direct (or cash) wage = $5.12).”
- 623-351 - Designation of paydays for employees; payment; exceptions; violation; classification; applicability; definitionazleg.gov · Official source · Checked Pinpoint: A.R.S. 23-351(A); A.R.S. 23-351(F); A.R.S. 23-351(D)(5)www.azleg.gov/ars/23/00351.htm
What the source says
“Each employer in this state shall designate two or more days in each month, not more than sixteen days apart, as fixed paydays for payment of wages to the employees.”
“When an employee's wages are paid to a payroll card account the employee shall be furnished with a written or electronic statement of the employee's earnings and withholdings.”
“and the employee does not provide consent and does not designate a financial institution, by deposit on the payday to the employee's credit to a payroll card account.”
- 723-364 - Enforcementazleg.gov · Official source · Checked Pinpoint: A.R.S. 23-364(I); A.R.S. 23-364(D)www.azleg.gov/ars/23/00364.htm
What the source says
“A county, city, or town may by ordinance regulate minimum wages and benefits within its geographic boundaries but may not provide for a minimum wage lower than that prescribed in this article.”
“Employers shall maintain payroll records showing the hours worked for each day worked, and the wages and earned paid sick time paid to all employees for a period of four years.”
“Employers shall post notices in the workplace, in such format specified by the commission, notifying employees of their rights under this article.”
- 8The Fair Wages and Healthy Families Act: 2027 Minimum Wage PosterIndustrial Commission of Arizona · Official source · Checked Pinpoint: poster, p. 1; poster, information, p. 1www.azica.gov/sites/default/files/2026-09/2027%20THE%20FAIR%20WAGES%20AND%20HEALTHY%20FAMILIES%20ACT_1.pdf
What the source says
“Effective January 1, 2027, Arizona's Minimum Wage Is: $15.65per hour”
“Industrial Commission’s Labor Department: 800 W.”
“(602) 542-4661.”
- 9Tucson Minimum Wage Act City of Tucsontucsonaz.gov · Official source · Checked Pinpoint: Summarywww.tucsonaz.gov/Departments/Business-Services-Department/Tucson-Minimum-Wage-Act
What the source says
“The current City of Tucson minimum wage is $15.45 per hour, effective from January 1, 2026 through December 31, 2026.”
“The City of Tucson minimum wage will increase to $16.00 per hour , effective from January 1, 2027 through December 31, 2027.”
“Employers may take a tip credit of no more than $3.00 for “tipped employees,” whose definition essentially matches that found under the federal Fair Labor Standards Act (FLSA).”
- 10What is a payroll card?Consumer Financial Protection Bureau · Official source · Page updated · Checked Pinpoint: paragraph following definitionwww.consumerfinance.gov/ask-cfpb/what-is-a-payroll-card-en-401
What the source says
“Your employer can’t require you to receive your wages on a payroll card.”
“Your employer has to offer you at least one alternative to a payroll card.”
- 1123-352 - Withholding of wagesazleg.gov · Official source · Checked Pinpoint: A.R.S. 23-352www.azleg.gov/ars/23/00352.htm
What the source says
“No employer may withhold or divert any portion of an employee's wages unless one of the following applies: 1.”
- 12Frequently Asked Questions About Minimum Wage and Earned Paid Sick TimeIndustrial Commission of Arizona · Official source · Page updated · Checked Pinpoint: minor employees, p. 10www.azica.gov/sites/default/files/media/EPST_MW_FINAL.pdf
What the source says
“Where a tipped employee is routinely assigned to duties associated with a non-tipped occupation, such as maintenance or general preparation work, no tip credit may be taken for the hours worked in performing such duties.”
“The Fair Wages and Healthy Families Act makes no distinction made between adults and minors in Arizona’s minimum wage laws.”
- 13Tip Regulations under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Checked Pinpoint: Regulatory History 2020-2024, item 3www.dol.gov/agencies/whd/flsa/tips
What the source says
“a federal court vacated the revision, with the effect of reinstating the Department’s original dual jobs regulation.”
- 14Field Assistance Bulletin No. 2026-1U.S. Department of Labor · Official source · Page updated · Checked Pinpoint: p. 1, introductory paragraphswww.dol.gov/sites/dolgov/files/WHD/fab/fab2026-1.pdf
What the source says
“These withdrawn opinion letters and the FOH provision that implemented them should no longer be relied upon as WHD enforcement guidance.”
- 15Minimum WageCity of Flagstaff · Official source · Checked Pinpoint: 2026 Minimum Wage; 2027 Minimum Wage; 2026 paragraph, no tip creditwww.flagstaff.az.gov/3520/Minimum-Wage
What the source says
“Effective January 1, 2026 Flagstaff's minimum wage is $18.35 per hour.”
“Effective January 1, 2027 Flagstaff's minimum wage will be $18.95 per hour.”
“All employees are required to make the full minimum wage, regardless of whether or not they regularly earn tips.”
- 16Attorney General Mayes Announces $20,000 Settlement with Two Phoenix-area Restaurants for Charging Undisclosed Add-on FeesArizona Attorney General · Official source · Page updated · Checked Pinpoint: 2023-04-28 AG release; Attorney General statementwww.azag.gov/press-release/attorney-general-mayes-announces-20000-settlement-two-phoenix-area-restaurants
What the source says
“The settlement prohibits the companies from charging fees not disclosed on the menu”
“restaurants that they must disclose all add-on charges on their menus”
- 17A.R.S. 44-1522, Unlawful practicesArizona Legislature · Official source · Checked Pinpoint: A.R.S. 44-1522(A), general consumer-fraud lawwww.azleg.gov/ars/44/01522.htm
What the source says
“concealment, suppression or omission of any material fact with intent that others rely on such concealment, suppression or omission,”
- 18Tip recordkeeping and reportingInternal Revenue Service · Official source · Checked Pinpoint: Service charges are not tips, paragraph 2; qualified tips deduction, net-income limit; tip income, Social Security/Medicarewww.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting
What the source says
“Service charges (also referred to as “auto-gratuities”), when distributed to an employee, are generally treated as wages paid by the employer to the employee rather than tips paid by the customer.”
“For self-employed individuals, the deduction may not exceed the individual’s net income (without regard to this deduction) from the trade or business in which the tips were earned.”
“These amounts are subject to federal income tax and generally are also subject to Social Security and Medicare taxes.”
- 19Revenue Ruling 2012-18Internal Revenue Service · Official source · Page updated 2012 · Checked Pinpoint: Q 1/A 1, four distinguishing factors; p. 1, ruling headingwww.irs.gov/pub/irs-drop/rr-12-18.pdf
What the source says
“compulsion; (2) the customer must have the unrestricted right to determine the amount; (3) the payment should not be the subject of negotiation or dictated by employer policy; and (4) generally, the customer has the right to determine who receives the payment.”
“Rev. Rul. 2012-18”
- 2023-353 - Payment of wages of discharged employee; violation; classificationazleg.gov · Official source · Checked Pinpoint: A.R.S. 23-353(A); A.R.S. 23-353(B)www.azleg.gov/ars/23/00353.htm
What the source says
“When an employee is discharged from the service of an employer, he shall be paid wages due him within seven working days or the end of the next regular pay period, whichever is sooner.”
“When an employee quits the service of an employer he shall be paid in the usual manner all wages due him no later than the regular payday for the pay period during which the termination occurred.”
- 21Fact Sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Page updated · Checked Pinpoint: Posting, paragraph 1www.dol.gov/agencies/whd/fact-sheets/21-flsa-recordkeeping
What the source says
“Each employer shall preserve for at least three years payroll records, collective bargaining agreements, sales and purchase records.”
“Employers must display an official poster outlining the provisions of the Act, available at no cost from local offices of the Wage and Hour Division and toll-free, by calling 1-866-4USWage (1-866-487-9243).”
“Records on which wage computations are based should be retained for two years,”
15Methodology
How we research these pages
Every figure on this page comes from an official source, a statute, a regulation or a government agency page, and links to it where it is used. Ferry checks the page against those sources on a schedule and logs every change.
- 1
Official sources only
Statutes, regulations, state labor agencies, city ordinances and the U.S. Department of Labor. No vendor blogs, no AI answers, no secondary summaries as the only source.
- 2
Every figure is linked
Each rate and rule carries a numbered link to the statute or agency page behind it, with the exact pinpoint and, where available, a link that opens at the sentence itself.
- 3
Re-checked on a schedule
Every page is re-checked each January and July, and whenever a state or city changes a rate. Cash wage plus tip credit is checked against the minimum wage on every build.
- 4
Gaps are left out, not guessed
If a rule can't be confirmed from an official source, it isn't shown. The page points to the state agency instead.
What changed on this page
- First version of this page. Every figure was checked against the official sources listed on this page.
Researched by Ferry's tip operations research team. Last reviewed .
Changes to the law itself are listed in What changed and what's coming.
16Every state
Tip laws in every state
Pick any state for its tip credit, tip pool, service charge and card tip rules. Each chip shows the state's tip credit class.
- No tip creditNo tip credit
- Above $2.13Tip credit, cash wage above federal
- $2.13 cashTip credit, federal cash wage
- FederalFederal rates apply
51 of 51 state pages. Open the master guide for the federal baseline, tip credit classes and the full comparison table.