This executive order directs 4 state agencies to share non-confidential information on whether businesses wrongly classify employees as contractors, and asks for reports by October 1, 2026, on state contractor labor-law compliance and worker retention; it creates no new rules or penalties for the public.
Official title: Protecting Paychecks for Hard-Working Arizonans
- May 20, 2026 (effective immediately upon signature)
- October 1, 2026: Arizona Department of Administration reports on state contractor labor-law compliance and worker retention
- October 1, 2026, or shortly thereafter: Agencies' joint recommendations on misclassification data and education
What changes
-
NowThe Department of Economic Security, Department of Revenue, Industrial Commission of Arizona and Registrar of Contractors shall share non-confidential information and evidence with one another, as permitted by law, about proper worker classification (contractor versus full-time employee). This includes final administrative decisions finding a business or licensee misclassified workers. They shall use it to cooperatively enforce state laws within each agency's authority.
-
NowThe Arizona Department of Administration shall review current state contract clauses, explore new policies such as payroll certification, consult with stakeholders and report to the Governor's Office by October 1, 2026, on better ensuring state contractors follow federal, state and local labor laws.
-
NowThe Arizona Department of Administration shall also report by October 1, 2026, on economically and operationally viable ways to encourage state contractors to keep their existing workers when taking on new state contracts.
-
NowThe agencies named in the order shall meet and report recommendations on October 1, 2026, or shortly thereafter, including ways to regularly compile and report data on employee misclassification across agencies and ways to increase education, awareness and compliance.
-
NowThe Registrar of Contractors shall convene an Industry Advisory Council on Paycheck Protection made up of businesses, workers and other relevant representatives. It shall meet at least 3 times before the agencies' recommendations are reported and include contact people from relevant agencies.
Who it affects
- Workers who may be classified as contractors instead of employees
- Businesses and licensed contractors, especially those with state contracts
- Department of Economic Security
- Department of Revenue
- Industrial Commission of Arizona
- Registrar of Contractors
- Arizona Department of Administration
What you need to do
Nothing.
What the law doesn't answer
- Whether payroll certification or worker-retention measures will actually be required in state contracts
- Which information counts as non-confidential and can be shared
- How many members the advisory council will have or how they will be chosen
- Any new penalties for businesses that misclassify workers
- Whether any funding is provided for this work
- What will happen after the reports are delivered
This summary describes the order as signed. Later laws, court rulings or referendum petitions can change the picture. Check the official text for the current wording.