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  1. #1
    Join Date
    Aug 2011
    Posts
    9

    Default Are Small Business Exempt from Paying Overtime

    My question involves employment and labor law for the state of: Arizona

    I have just completed my first week on a new job as a Security Guard and I did put in more than 40 hours.

    The owner of the company said that they don't have to pay Over Time because of an Arizona Law that says any small business that makes less than $500,000 or $1,000,000 per year (she wasn't sure of the exact amount) is exempt.

    I scoured through the Arizona Revised Statutes Title 23 which governs Labor Law but couldn't find anything close to what she was saying.

    Please assist me in obtaining a fuller understanding if there is one?

    Thank You,
    HMPhx

  2. #2
    Join Date
    Mar 2007
    Posts
    9,096

    Default Re: Arizona Small Business Exempt from Paying Over Time

    Here are the relevant questions from the Arizona Department of Labor FAQ...

    Do the requirements of the Arizona Minimum Wage Act apply to all employers?
    The Arizona Minimum Wage Act applies to all employers except:
    The State of Arizona;
    The United States; and
    Small businesses that are not subject to the Federal Fair Labor Standards
    Act and which have less than $500,000 in gross annual revenue. This
    exclusion for small businesses under the Arizona Minimum Wage Act is
    very limited. Practically speaking, most Arizona small businesses will be
    subject to the Arizona Minimum Wage Act. This is because most
    employers, including small businesses, are subject to the Federal Fair
    Labor Standards Act. Under the Federal Fair Labor Standards Act
    coverage extends in one of two ways: Enterprise coverage or individual
    coverage. Employees who work for an “enterprise” that is engaged in
    interstate commerce or the production of goods for commerce are covered
    under the FLSA. Likewise, regardless of the volume of sales of an
    enterprise (more or less than $500,000), individual employees whose work
    affects interstate commerce are covered under the FLSA.

    Are there any exemptions under the Arizona Minimum Wage Act?
    Unlike the Federal Fair Labor Standards Act, the Arizona Minimum Wage Act has very
    few exemptions. The Arizona Minimum Wage Act applies to any employee employed by
    an employer except the following:
    A person who is employed by a parent or a sibling;
    A person who is employed performing babysitting services in the
    employer’s home on a casual basis;
    A person employed by the State of Arizona or the United States
    government; and
    A person employed in a small business grossing less than $500,000 in
    annual revenue, if that small business is not required to pay minimum
    wage under the Federal Fair Labor Standards Act. This exclusion for small
    businesses under the Arizona Minimum Wage Act is very limited.
    Practically speaking, most Arizona small businesses will be subject to the
    Arizona Minimum Wage Act. For additional discussion of this exemption,
    please see the preceding question.

  3. #3
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default Re: Arizona Small Business Exempt from Paying Over Time

    Under Federal (not Arizona) law, a business which does less than $500,000 per year AND which does absolutely no interstate commerce whatsoever, is exempt from paying overtime.

    The definition of interstate commerce is so broad that virtually no employers are able to meet that prong of the fork. Does the business have any out of state clients? Buy their uniforms from out of state? Are the uniforms MADE out of state? Does she ever have to make so much as an out of state phone call in the way of business?

    If she makes under $500,000 per year and absolutely every factor of the business remains within Arizona, then she is right; she is exempt from paying overtime. But if she engages in any form of interstate commerce at all, then she is not exempt from paying overtime, regardless of how much, or how little, the business makes annually.

    State law cannot make this Federal requirement go away.

    Here is some information for you to show her.

    http://www.dol.gov/compliance/guide/minwage.htm

    http://www.dol.gov/whd/regs/compliance/hrg.htm

  4. #4
    Join Date
    Apr 2007
    Location
    Il.(near StL,Mo.)
    Posts
    5,252

    Default Re: Arizona Small Business Exempt from Paying Over Time

    I don't know what type of business this is but it is very, very doubtful that she doesn't engage in some
    form of interstate commerce.

  5. #5
    Join Date
    Aug 2011
    Posts
    9

    Default Re: Arizona Small Business Exempt from Paying Over Time

    Hey All, thank you very much for the input.

  6. #6
    Join Date
    Apr 2007
    Location
    Il.(near StL,Mo.)
    Posts
    5,252

    Default Re: Arizona Small Business Exempt from Paying Over Time

    You're welcome.

  7. #7
    Join Date
    May 2008
    Location
    FL
    Posts
    51

    Default Re: Arizona Small Business Exempt from Paying Over Time

    If the security guard or maintenance worker is employed in an establishment that is engaged in commerce or in the production of goods for commerce, such as a warehouse, factory, bank, insurance company, etc, he/she is covered by the FLSA.

    see this link
    http://www.dol.gov/whd/regs/compliance/whdfs4.pdf

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