Sky Schaudt/KJZZ

Arizona's minimum wage is $12.80 per hour as of Jan. 1, 2022.

Starting Jan. 1, 2023, Arizona’s minimum wage will increase more than a dollar an hour. The hike is meant to keep up with the cost of living.

As a result of voter-approved laws, Arizona’s minimum wage will increase based on annual inflation adjustments. The federal Bureau of Labor Statistics said prices rose about 8% over the past year. That means Arizona’s minimum wage will go from $12.80 an hour to $13.85.

State law allows employers to pay employees who earn tips and gratuities $3 an hour less as long as they receive the minimum for all hours worked.

Voters in Flagstaff approved a higher minimum wage in 2016 and so that city’s rate will jump from $15.50 an hour to $16.80. The minimum for Flagstaff workers who earn tips will go from $13.00 an hour to $14.80.

Flagstaff City management analyst Chris Rhode credits a voter-approved initiative.

“Beginning in 2023, the wage is set to increase every year proportional to the increase of inflation,” Rhode said.

Rhode says the city has been meeting with business groups since the summer to keep them up to speed with the coming changes.