Arizona — Termination

Arizona establishes that the employment relationship is severable at the pleasure of either the employee or the employer unless both parties have signed a written contract to the contrary. A qualifying written contract must set forth that the employment relationship shall remain in effect for a specified duration of time or otherwise expressly restrict the right of either party to terminate. The contract may also be set forth in an employment handbook or manual if that document expresses the intent that it is a contract of employment.

Source: A.R.S. § 23-1501(A)(2)

Arizona law imposes distinct deadlines for final wage payment depending on whether the employment relationship ends by employer action or employee resignation.

Involuntary termination (discharge). When an employer discharges an employee, the employer must pay all wages due within seven working days or by the end of the next regular pay period, whichever is sooner. A.R.S. § 23-353(A). "Working days" means business days, excluding weekends and holidays. The statute uses a whichever-is-sooner test, so an employer with a weekly pay period that falls four days after termination must pay by that payday; an employer with a monthly pay period must pay within seven working days.

Voluntary quit. When an employee quits, Arizona requires the employer to pay all wages due "in the usual manner" no later than the regular payday for the pay period during which the termination occurred. A.R.S. § 23-353(B). The statute does not permit delay to the following pay period; the final paycheck is due on the same payday that would have applied had the employee remained employed through that period. If requested by the employee, the wages must be paid by mail. Id.

Scope of "wages due." Under Arizona's Payment of Wages article (A.R.S. Title 23, Chapter 2, Article 7), "wages" means nondiscretionary compensation due an employee in return for labor or services rendered, for which the employee has a reasonable expectation to be paid, whether determined by time, task, piece, commission, or other method. A.R.S. § 23-350(7). This definition includes regular pay, overtime, earned commissions, and—critically—any accrued but unused paid time off (vacation, PTO, or paid sick time under the Fair Wages and Healthy Families Act) if the employer's written policy, contract, or established past practice created a reasonable expectation of payout upon separation. Arizona does not mandate PTO payout by statute, but an employer's own policy or past practice can convert accrued leave into a wage obligation subject to the final-paycheck deadlines.

Mail delivery. For voluntary quits, the employee may request payment by mail, and the employer must comply. A.R.S. § 23-353(B). The statute is silent on mail delivery for involuntary terminations, so employers proceeding by mail should ensure the check is postmarked (or direct-deposited) within the statutory window; late arrival does not excuse a late mailing.

Remedies. Failure to pay final wages on time is a petty offense under A.R.S. § 23-353 (titled "Payment of wages of discharged employee; violation; classification") and may also trigger civil liability. An employee may file a wage claim with the Arizona Industrial Commission of Arizona (ICA) if the unpaid wages are less than $5,000 and accrued within one year, or bring a civil action in state court. A.R.S. § 23-355(A) authorizes an employee to recover in a civil action "an amount that is treble the amount of the unpaid wages" when the employer violates the Payment of Wages chapter. Arizona courts have interpreted the "may recover" language as discretionary, not mandatory; treble damages are typically awarded when the employer delayed payment without reasonable justification or acted in bad faith, though administrative oversight can also support an award. Crum v. Maricopa County, 190 Ariz. 512, 950 P.2d 1367 (Ct. App. 1997). Employers should treat final-paycheck deadlines as hard compliance gates.

Source: A.R.S. § 23-353 Source: A.R.S. § 23-350 (Definitions) Source: A.R.S. § 23-355 (Treble damages)