covered contracts; governmental unit; payroll

HB2462 - 572R - I Ver

REFERENCE TITLE:
covered contracts; governmental unit;
payroll

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 2462

Introduced by

Representatives
Sandoval: Aguilar, Austin, Connolly, Garcia, Liguori, Luna-N�jera, M�rquez,
Stahl Hamilton, Villegas;� Senators Kuby, Ortiz

AN
ACT

Amending title 41, chapter 23, article 3,
Arizona Revised Statutes, by adding section 41-2560; relating to PROCUREMENT.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 41, chapter 23, article 3,
Arizona Revised Statutes, is amended by adding section 41-2560, to read:

START_STATUTE
41-2560.

State governmental unit; covered contract; payroll records;
successor contractor; applicability; definitions

A. In a contract entered into by a
state governmental unit that meets the criteria of a covered contract, the
state governmental unit shall require the contractor and any subcontractors to
submit certified payroll records for employees performing work under the
contract, in the manner and at the frequency prescribed in the contract.

B. Certified payroll records
submitted pursuant to subsection A of this section shall do all of the
following:

1. Accurately reflect the hours
worked, job classifications and wages paid to each employee performing work
under the contract.

2. Include a signed statement of
compliance attesting that the payroll records are true and correct.

C. For a covered contract awarded to
a successor contractor to perform substantially similar services as the initial
contractor, the state governmental unit shall require contract provisions that
ensure worker retention during the transition period.

D. The successor contractor shall
offer employment to qualified employees who performed work under the initial
contractor and whose positions are necessary for performance of the covered
contract.

E. During the transition period
described pursuant to subsection C of this SECTION, retained employees may not
be terminated or have their hours reduced except for cause, documented
performance-related reasons or documented lack of work.

F. The successor contractor shall
maintain records sufficient to demonstrate compliance with this section.

G. This section does not require the
payment of a prevailing wage or any minimum wage other than wages otherwise
required by law.

H. This section does not apply to any
of the following:

1. Contracts for commodities or
commercially available off-the-shelf products.

2. Contracts priced solely on a fixed
deliverable basis without labor hour reporting.

3. Contracts below a dollar threshold
established by rule by the director.

I. A state governmental unit may rely
on payroll records or worker retention documents that are submitted to comply
with any applicable federal laws and to satisfy the requirements of this
section.

J. For the purposes of this section:

1. "Covered contract" means
a contract entered into by a state governmental unit in which all of the
following apply:

(
a
) The
contractor or subcontractor is compensated in whole or in part based on labor
hours worked.

(
b
) The
contract is funded or assisted, in whole or in part, by federal monies that
require payroll certification.

2. "Successor contractor"
means a contractor that is awarded a covered CONTRACT to perform substantially
similar services that were previously performed by another contractor under an
expired or terminated covered contract.
END_STATUTE