Having Full-Time or Part-Time Employees

Having Full-Time or Part-Time Employees

As a business owner, when another person performs work for you, you must first correctly classify that person as an independent contractor or employee before you can know how to treat payments that you make to that person. 

If you plan to hire one or more employees within Arizona, you will be subject to both federal and state requirements. Below are some resources to help connect you to the information you need. You may also wish to consult with your accountant or attorney for assistance.

  • Employers paying wages to employees for services performed in the state must register to remit withholding tax. The Arizona Joint Tax Application is used to register for your employer withholding/unemployment insurance license. The application is called "Joint" because it is used by both the Departments of Revenue and Economic Security. 
    Register Online: Businesses > Enroll to File and Pay Online (for Employer Withholding and Unemployment Insurance License)
    Download Form: Joint Tax Application for a TPT License (JT-1)  
    Arizona Department of Revenue: Arizona Withholding Tax
    602.255.3381 or toll-free 800.843.7196 (from area codes 520 and 928) 
    Arizona Department of Economic Security - Questions Regarding Unemployment Tax 
    Arizona Department of Economic Security (DES): Unemployment - Employer
    Unemployment Insurance Tax (UIT) - Frequently Asked Questions
  • Under Arizona law, it is mandatory for employers to secure workers’ compensation insurance for their employees. Workers’ compensation is a “no fault” system in which an injured employee is entitled to receive benefits for an industrial injury, no matter who caused the job-related accident. Employers are required to bear the entire cost of workers' compensation insurance.
    Companies may choose to insure their employees by insuring with an authorized carrier of the state, or by qualifying as a self-insurer under the rules and regulations of the Industrial Commission of Arizona. (17)

    The Arizona Department of Insurance and Financial Institutions (DIFI) can verify if a company is licensed and authorized to sell workers’ compensation insurance in the State of Arizona.

    Contact: Arizona Department of Insurance and Financial Institutions (DIFI), Consumer Affairs Division, 602.364.2499 or 800.325.2548 

    The Industrial Commission of Arizona administers the Workers' Compensation Law. (17)
    Industrial Commission of Arizona, Claims Division: What Is Workers' Compensation and How Does It Work? 
    Phoenix area 602.542.4661 or Tucson area 520.628.5181 
  • On October 1, 1998, the Arizona New Hire Reporting Program from the Arizona Department of Economic Security, Division of Child Support Enforcement was established. State and federal law requires all employers to report each new and rehired employee to the State Directory of New Hires within 20 days of their hire date.   
    Contact: Arizona New Hire Reporting Center, 888.282.2064
  • Arizona law requires employers in Arizona to use the “E-Verify” system (a free Web-based service offered by the federal Department of Homeland Security) to verify the employment authorization of all new employees hired after December 31, 2007.  
    E-Verify: Enroll in the Program
    The Arizona Attorney General's Office web site provides basic information about the Legal Arizona Workers Act, sometimes called the “Employer Sanctions Law,” as amended. 

Additional Information
Employer Handbook on Unemployment Insurance Tax
: A publication of the Arizona Department of Economic Security to help you understand the Employment Security Law of Arizona and the withholding provisions of the State Income Tax regulations. 

Fair Labor Standards Act (FLSA) 
The Fair Labor Standards Act (FLSA) is a federal law administered by the Wage and Hour Division of the U.S. Department of Labor (DOL). This law establishes minimum wage, overtime pay and child labor standards for employers. The Industrial Commission of Arizona (ICA) has jurisdiction over all businesses in the state that are not covered by the FLSA. The Industrial Commission also shares jurisdiction with the Wage and Hour Division when both federal and state laws are the same. Visit the DOL website for easy-to-understand information about a number of federal employment laws. In addition, visit the ICA website. (17)

U.S. Department of Labor (DOL), elaws: Information about Federal Employment Laws   

Industrial Commission of Arizona (ICA), Labor Department: Information on State Labor Laws/Youth Employment/Wages 

Occupational Safety and Health Act of 1970 
The Industrial Commission of Arizona, under the Occupational Safety and Health Act of 1970, is the state agency charged with regulating industrial plants for fire, health and safety requirements. The safety standards enforced in Arizona are the same standards used by the U.S. Department of Labor. Arizona provides a consultation program from which businesses can obtain information to determine whether their facilities are in compliance with safety standards. For information on the State Plan Osha Program, visit OSHA’s website. (21)

Industrial Commission of Arizona, Arizona Division of Occupational Safety and Health (ADOSH)

U.S. Department of Labor - Occupational Safety & Health Administration (OSHA): Occupational Safety and Health Act of 1970 

OSHA’s “Safety Pays” Program Provides Planning Tool for Businesses: Interactive tool to help employers approximate the costs of occupational injuries and illnesses and the estimated impact on a company’s profitability. 

U.S. Department of Labor, Occupational Safety and Health Administration, Help for Employers: How to comply, go beyond compliance, and improve your bottom line

U. S. Equal Employment Opportunity Commission (EEOC): Information is available from the U. S. Equal Employment Opportunity Commission (EEOC) for small businesses including a brief fact sheet, a booklet concerning the laws enforced by EEOC, and information concerning the mediation program which you are encouraged to consider in the event a charge of discrimination is filed against your business. 
Phoenix District Office: 602.640.5000 or 602.640.5052 or 602.640.5024 or 800.669.4000  

Governor's Office of Equal Opportunity: The mission of the Governor's Office of Equal Opportunity (GOEO) is to prepare, revise and administer the State of Arizona Equal Opportunity Guidelines for equal employment opportunity and economic growth as outlined in Executive Order 93-20. 
Maricopa Skill Center, division of GateWay Community College: Offers quality driven, workforce training programs. Coming soon are the following Green Technology Certifications: Solar Photovoltaic Installer, Solar Thermal Installer, Energy Auditor and Alternative Wall System Installer. These programs are developed in partnership with the City of Phoenix.


The Arizona Department of Insurance and Financial Institutions (DIFI) website provides health insurance resources such as publications, compared premiums, complaint ratios, health insurance resources, and more. 


IRS Tax Information for Businesses: If you decide to hire full-time or part-time employees, visit the IRS website for tax information for businesses. 


Internal Revenue Service - Tax Information for Retirement Plans Community: Forms, publications and information on how to start, maintain and administer a retirement plan.

SIMPLE (Savings Incentive Match Plan for Employees of Small Employers) IRA Plan: Provides employers and their employees with a simplified way to contribute toward retirement. 
U.S. Department of Labor's Employee Benefits Security Administration (EBSA) 
Compliance Assistance > For Small Businesses 
SIMPLE IRA Plans for Small Businesses  
Toll free: 866.444.EBSA (3272) 

Employers Council: Non-profit membership organization, founded in 1939, designed to partner with employers to maintain effective employer/employee relationships. A "one-stop shopping" resource for members in the areas of human resource management, employment law, surveys and training. (22)
602.955.7558 or Arizona toll free 800.437.9262