What is an Exempt Employee in Arizona?

When managing a workforce in Arizona, one of the most critical HR responsibilities is correctly classifying your employees. The difference between exempt and non-exempt employees isn’t just about job titles — it's about legal rights, pay structures, and potential liabilities. Knowing these classifications under Arizona labor laws is essential for business compliance and sustainable growth.

Being a recruiter or hiring manager, misclassifying an employee can lead to legal issues, back pay claims, and damage to your company's reputation. In this article, we’ll break down everything you need to know about an Exempt Employee Arizona, and how it compares to a non-exempt classification.

Let’s explore:

• The meaning of Exempt Employee Arizona
• Classification criteria
• Differences between Exempt vs Non-Exempt Arizona employees
• Salary thresholds and job duties
• Compliance with Arizona employment laws and FLSA

What is an Exempt Employee Arizona?

An Exempt Employee Arizona is someone who is exempt from certain wage and hour laws, particularly those related to overtime pay and minimum wage under the federal Fair Labor Standards Act (FLSA) and Arizona labor laws. This usually means the employee:

• Is paid a salary rather than an hourly rate
• Meets specific exempt salary minimum thresholds
• Performs certain job duties as defined by federal and state guidelines

Exempt employees are not eligible for overtime, even when working more than 40 hours per week. This is in contrast to non-exempt employees, who must be paid overtime according to arizona overtime laws and az labor laws.

Exempt vs Non-Exempt Arizona: Key Differences

Understanding this distinction is key to remaining compliant with salary employee laws in Arizona.

Exempt Employee Rules in Arizona

The classification of an Exempt Employee Arizona depends on two primary factors: salary and job duties. Let’s dive into each.

1. Salary Basis Test

To be considered exempt, the employee must earn at least the minimum exempt salary. According to the Department of Labor Arizona, and as of recent federal updates:

• The employee must earn at least $684 per week or $35,568 per year.
• Some exceptions, like Highly Compensated Employees, require a higher threshold (over $107,432 annually).

If the employee earns less than this exempt employee minimum salary, they must be classified as non-exempt, even if their duties align with exempt roles.

✅ Important: Salary must be fixed and not dependent on the number of hours worked.

2. Duties Test for Exempt Employees

Apart from salary, the job itself must meet the duties test for exempt employees, which falls under these common categories:

a. Executive Exemption

• Primarily manages the business or a department
• Directs the work of at least two full-time employees
• Has hiring and firing authority or significant input

b. Administrative Exemption

• Performs non-manual work related to business operations
• Exercises independent judgment and discretion
• Common roles include HR professionals, finance managers, and compliance officers

c. Professional Exemption

• Requires advanced knowledge, usually obtained through education (e.g., law, medicine, science)
• Fields include doctors, lawyers, engineers, and teachers

d. Outside Sales Exemption

• Regularly works away from the employer’s place of business
• The primary duty is making sales or obtaining orders

If an employee doesn’t meet both the salary exempt requirements and job duty criteria, they must be treated as non-exempt under AZ overtime laws and are entitled to overtime.

Arizona Labor Laws: Hours, Overtime & Minimum Wage

Let’s cover how labor laws in AZ and federal standards impact your exempt employee policies.

What is considered full-time in Arizona?

• There is no legal definition, but 40 hours/week is widely recognized.
• Some employers define how many hours is full time in AZ as anything over 32 or 35 hours.

How many hours is part-time in AZ?

• Generally considered under 30–35 hours/week.

What's minimum wage in Arizona?

• As of 2025, $14.35/hour. Adjusted yearly based on inflation.

Even Exempt Employee Arizona staff must receive at least the minimum wage for salaried employees if they're not properly classified, so it's critical to stay compliant with arizona minimum wage law.

Overtime Laws in Arizona

• Non-exempt employees earn 1.5x regular pay after 40 hours/week.
• Exempt employee overtime is not paid, even if hours exceed 40.
• Still, employers should monitor workloads and ensure fairness.

Arizona Labor Laws Hours Worked in a Day

• No daily limit, but employers must track time for non-exempt employees.

Also read: Exempt and Non-Exempt Employees: What’s the Difference? (with FLSA Guidelines)

Recordkeeping & Legal Compliance

Under both Arizona labor laws and FLSA, employers must:

• Keep detailed records of employee salaries, classifications, and hours
• Justify exempt classifications with documentation
• Monitor changes in salary threshold for exempt employees to remain compliant

Consulting the Department of Labor Arizona or an employment attorney can help you align with all Arizona employment laws.

EasySource: Simplify Hiring for Exempt Roles

Hiring for roles that meet the Exempt Employee Arizona criteria? Try EasySource—the world’s first fully automated talent sourcing tool tailored for recruiters.

Why use EasySource?

• Filter by salary, skills, work status, and location
• Access salaried exempt employee candidates faster
• Engage through automated messages across LinkedIn and email
• Save hours of manual sourcing with AI-powered automation

With EasySource, identifying the right exempt-level talent has never been easier.

Conclusion: Classify Right, Stay Compliant

Understanding who qualifies as an Exempt Employee Arizona is vital to operating a compliant, efficient, and ethical business. Misclassifying employees can lead to fines, lawsuits, and operational issues.

As a recruiter or employer, you must know:

• The exempt vs non-exempt Arizona distinction
• Current exempt salary minimums
• Applicable Arizona labor laws
• Proper job duty classifications

Stay proactive, audit your classifications regularly, and use tools like EasySource to hire confidently within legal boundaries.