Arizona PEO Law FAQs
Does Arizona require PEOs to register with the state?
No. Arizona's PEO registration requirement was repealed by HB 2252 (approved April 2, 2024), which repealed A.R.S. 23-563 through 23-568 and 23-575 through 23-576. There is no PEO registration or renewal cycle, and the former regulator was the Arizona Secretary of State.
What financial or security requirement do Arizona PEOs face?
Arizona requires PEOs located in the state to maintain a minimum net worth of $100,000, or post a bond, irrevocable letter of credit, or securities with a minimum market value of $100,000 held by an insured depository institution, under A.R.S. 23-569 as amended by HB 2252.
What is Arizona's unemployment insurance (SUI) taxable wage base?
Arizona's SUI taxable wage base is $8,000 per employee per calendar year (raised from $7,000 effective January 1, 2023). The new-employer rate is 2.0% for a minimum of two calendar years. A PEO reports and pays using its own account number and contribution rate under A.R.S. 23-614.
Is workers' compensation mandatory in Arizona?
Yes. Employers in Arizona are required to carry workers' compensation insurance. There is no state fund; the State Compensation Fund board terminated July 1, 2012, and its successor is a private mutual insurer, not a state agency.
What is Arizona's minimum wage?
Arizona's minimum wage is $15.15 per hour (2026). It is adjusted annually for inflation under Proposition 206, administered by the Industrial Commission of Arizona.
Does Arizona require paid sick leave?
Yes. Arizona provides earned paid sick time under Proposition 206 (A.R.S. 23-371 et seq.), administered by the Industrial Commission of Arizona.