ARIZONA STATE SENATE

NICHOLAS GUSTOFF

ASSISTANT RESEARCH ANALYST

JASON THEODOROU

LEGISLATIVE RESEARCH ANALYST

REGULATORY AFFAIRS & GOVERNMENT EFFICIENCY COMMITTEE

Telephone: (602) 926-3171

RESEARCH STAFF

TO:                  MEMBERS OF THE SENATE

APPROPRIATIONS, TRANSPORTATION & TECHNOLOGY COMMITTEE

DATE:            February 19, 2026

SUBJECT:      Strike everything amendment to S.B. 1267 relating to minimum wage; applicability

Purpose

            Exempts, from Arizona's minimum wage requirements, employees with disabilities who are covered by an issued special certificate in accordance with the federal Fair Labor Standards Act of 1938 (FLSA). Contains requirements for enactment for initiatives and referendums (Proposition 105).

Background

            The FLSA established minimum wage, overtime pay, recordkeeping and employment standards for youth, full-time, part-time and disabled employees. As of July 24, 2009, the federal minimum wage is $7.25 per hour (29 U.S.C. § 206).

            The U.S. Department of Labor, to the extent necessary to prevent curtailment of opportunities for employment, must by regulation or order provide for the employment, under special certificates, of individuals whose earning or productive capacity is impaired by age, physical or mental deficiency, or injury, at wages which are: 1) lower than the minimum wage;
2) commensurate with those paid to nonhandicapped workers, employed in the vicinity in which the individuals under the certificates are employed, for essentially the same type, quality, and quantity of work, and 3) related to the individual’s productivity (29 U.S.C. § 214c).

            In 2006, voters approved Proposition 202 which increased Arizona's hourly minimum wage to $6.75 and implemented annual, cost-of-living increases based on the Consumer Price Index (CPI). In 2016, voters approved Proposition 206 which increased Arizona's hourly minimum wage in four stages from $10.00 in 2017, to $12.00 by 2020 and implemented annual, cost-of-living increases based on the CPI (Proposition 202 and 206; A.R.S. § 23-363). According to the Industrial Commission of Arizona (ICA), the state minimum wage in 2026 is set at $15.15 an hour (ICA).

            There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1. Exempts, from Arizona's minimum wage requirements, employees with disabilities who are covered by a special certificate that is issued by the U.S. Department of Labor in accordance with the FLSA.

2. Contains a statement of legislative intent.

3. Requires for enactment the affirmative vote of at least three-fourths of the members of each house of the Legislature (Proposition 105).

4. Makes technical changes.

5. Becomes effective on the general effective date.