Arizona is an “at will” state, which means that if you do not have a written employment agreement your employer can terminate you for almost any reason. However, you cannot be terminated based on your race, sex, national origin or in retaliation for making complaints for, among other things, sexual harassment.
If you have been terminated Arizona law requires your employer to pay you all wages (salary, bonuses, etc.) within seven days or on your normal payday — whichever is earlier. If your employer does not do this you may have a claim against your employer for treble (three times) the amount owed to you, plus your legal fees. The employer cannot pay you if it has a “good faith” basis for disputing the amount owed and even then can only withhold the amount in dispute and not any undisputed part.
Employers sometimes claim that they have a good faith basis for not paying, but in reality are not paying based on ill will towards the former employee. This puts the employer at risk. The employer should often consult with legal counsel before withholding wages from an employee. My law firm consults with employers regularly on this tricky issue. Issues such as whether you cannot pay an employee their wages because the employee took company property or client lists or is now violating a non-compete all need to be examined closely before simply not paying an employee his or her wages.
In addition to having a private attorney seek to recover your wages owed, when wages owed to an employee are no more than $5,000, the employee may file a wage claim with the State Labor Department. Upon receipt of a claim, the Department will notify the employer of the claim and investigate the case. After investigation of the claim, the Department will provide a written determination, which can only be appealed to Superior Court.
I represent employees and employers in wage disputes and can tell you that courts do award treble damages and legal fees against employers who do not pay legitimate wages owed.
Some companies have policies in place that require any disputes to be resolved through arbitration as opposed to in court. This is generally good for both sides since arbitration is generally quicker and cheaper.
Employment law can be very tricky. Because employment issues can be thorny, consulting with a knowledgeable employment attorney early on any employment issues is advisable.
• Brian Foster is a 20-year Ahwatukee resident and senior partner at Snell & Wilmer L.L.P. in Phoenix. Reach him at (602) 382-6242 or firstname.lastname@example.org.