Who Are Considered State Employees: Covered vs. Uncovered Status

In Arizona state government, every employee inside the state personnel system carries one of two labels: covered or uncovered. That single classification decides whether you can be fired only for cause with a right to appeal, or whether you serve at will and can be let go without explanation. Since September 29, 2012, new hires enter state service as uncovered at-will employees unless the law puts them in a different bucket, so the covered vs. uncovered status of an Arizona state employee is no longer something most workers earn by finishing probation — it’s determined the day they’re hired.¹

What Each Status Actually Means

A covered employee can only be fired, suspended for more than 80 working hours, or involuntarily demoted for reasons listed in statute, and the state must follow a formal process before acting. If the agency doesn’t have cause, it doesn’t have the authority.

An uncovered employee is at will. The agency doesn’t have to prove anything, doesn’t have to give a reason, and doesn’t have to offer a hearing before ending the employment. Both groups receive the same basic benefits package. The gap is in job security, not pay or leave.

Who Is Uncovered

Two things put you in the uncovered category. The first is your hire date. Anyone hired into the state personnel system on or after September 29, 2012, starts as an at-will uncovered employee. The old pathway to covered status after a probationary period closed on that date. If you were hired before then and earned covered status, you keep it unless you voluntarily give it up.¹

The second is your position. Regardless of when you were hired, Arizona law makes the following roles at-will uncovered employees:

Attorneys assigned to the attorney salary schedule
Supervisors in any agency within the personnel system
Employees at pay grade 19 or above, or the equivalent under a successor compensation system
Information technology workers assigned to the IT salary schedule or an IT classification

If you’re promoted into one of these roles, your status converts to uncovered on the start date of the new assignment.¹

How a Covered Employee Loses Covered Status

There are two ways this happens. You can accept a promotion, demotion, or lateral transfer into an uncovered position, which automatically converts your status on the start date. Or you can elect to become uncovered without changing positions, if both your agency head and the director of the state personnel system approve.¹

The change is permanent. Once you become uncovered, you cannot go back. No appeal, no cooling-off period, no exception. A promotion that moves you into the uncovered service is a trade: the new title in exchange for for-cause protections. The trade might be worth making, but it’s worth making knowingly.

Positions Outside the System Entirely

Some state jobs sit outside the covered/uncovered framework because the state personnel system doesn’t reach them at all. If you work in one of these roles, your employment terms come from your employer’s own rules, not from the statutes described here:

Elected officials, though not their staff unless the law specifically says so
Board and commission members appointed by the legislature or governor
Legislative employees, including staff of the Arizona Legislative Council and both chambers
Judicial employees of the Supreme Court and Court of Appeals
University personnel under the Arizona Board of Regents, including the state schools for the deaf and blind
Arizona National Guard officers, enlisted personnel, and certain Department of Emergency and Military Affairs employees in guard mobilization positions
Department of Public Safety employees
Arizona Peace Officer Standards and Training Board employees
Patients or inmates employed in state institutions

The distinctions in this article apply to employees in the state personnel system. If you work for one of the entities above, the answer to “am I covered or uncovered” is neither.¹

What Covered Employees Get

Covered status is the closest thing Arizona state employees have to job tenure. The state can only discipline a covered employee for reasons listed in statute, and the director of the state personnel system must review any dismissal, suspension over 80 working hours, or involuntary demotion before it takes effect.²

The statutory grounds for discipline or dismissal of a covered employee include:

Incompetence, inefficiency, or neglect of duties
Insubordination or willful disobedience
Fraud or dishonesty, including misrepresentation when applying for the job
Being impaired by alcohol or drugs on duty
Unauthorized absence or absence without leave
Committing a felony or a crime involving moral turpitude
Discourteous treatment of the public or coworkers
Improper political activity
Misuse of state property

The director can also establish additional grounds beyond this list.³ The practical effect is that a covered employee can’t be fired because a new supervisor wants a different team. There has to be a documented, defensible reason drawn from the statute.

Pre-Termination Notice

Before dismissing a covered employee, the agency must provide written notice of the charges. The notice has to lay out the factual basis and legal grounds, explain why dismissal is being considered, and give the employee at least three working days to respond in writing. This tracks the federal due process framework the U.S. Supreme Court set out in Cleveland Board of Education v. Loudermill (1985), which requires notice, an explanation of the evidence, and an opportunity to respond before a public employee with for-cause protections can be terminated.

Appeal Rights

A covered employee who is fired, demoted involuntarily, or suspended for more than 80 working hours can appeal to the State Personnel Board. The appeal must be filed within ten working days after the action takes effect.⁴ Miss that window and the right to appeal is gone.

The board reviews whether the agency proved the facts behind its decision by a preponderance of the evidence. If the agency met that burden, the board upholds the discipline unless the decision was arbitrary and capricious. If the agency failed to prove the facts, the board identifies which facts fell short and can recommend a different disciplinary action. If the board finds no cause for any discipline, it reverses the decision and returns the employee to their former position, with or without back pay.⁵

The board’s decision isn’t the final word. The agency director has 14 days to accept, modify, or reverse the board’s findings, and the agency director’s decision is final and binding. The board acts as a check on arbitrary action; the agency retains the last call.

Lesser Discipline

Written reprimands and suspensions of 80 working hours or less don’t go to the Personnel Board. Covered employees use their agency’s internal grievance procedure, which every agency with covered employees is required to maintain. Full-authority peace officers have a lower threshold: they can appeal suspensions of more than 40 working hours to the Law Enforcement Merit System Council instead of the Personnel Board.

What Uncovered Employees Don’t Get

Uncovered employees have no statutory right to appeal a termination to the Personnel Board and no entitlement to a pre-termination hearing. The agency does not owe an uncovered employee a reason for letting them go. That is the practical cost of at-will status, and it’s what changed for the state workforce in 2012.

Rights That Apply Regardless of Status

Several protections don’t turn on whether you’re covered or uncovered. They apply to everyone in the state personnel system.

Whistleblower Protection

Arizona law prohibits any supervisor or manager from retaliating against an employee who reports wrongdoing to a public body. The protection covers disclosures of violations of law, mismanagement, gross waste of public money, and abuse of authority. The disclosure must be in writing and include the employee’s name, the nature of the alleged problem, and the approximate dates it occurred.⁶

If retaliation occurs, the remedies include back pay, general and special damages, attorney fees, costs, and full reinstatement. A complaint filed with the State Personnel Board (for covered employees) or an appropriate independent personnel board, if sustained, requires the board to rescind the personnel action and restore all lost pay and benefits. Injunctive relief in court is also available, though attorney fee awards in court actions are capped at $10,000.⁶

Any complaint has to be filed within ten working days of the retaliatory action. That deadline is short and unforgiving.

Anti-Discrimination

The state personnel system is built on the principle that employees should be managed “without regard to political affiliation, race, color, national origin, sex, age, disability or religious creed.”¹ Arizona’s civil rights statute makes it unlawful for any employer, including the state, to discriminate in hiring, firing, pay, or working conditions based on race, color, religion, sex, age, national origin, or disability, and it also prohibits discrimination based on genetic test results.⁷

Federal and Arizona law also require the state to provide reasonable accommodations for employees with disabilities unless doing so would impose an undue hardship. A request can be made orally or in writing, and the agency must then engage in an interactive process to identify what will work.⁷

Merit System Principles

Every agency in the state personnel system is required to manage its workforce according to merit-based principles written into statute:

Hiring and promotion must be based on ability, knowledge, and skills after open competition.
Compensation must reflect merit, performance, job value, and labor market competitiveness.
Training should be provided when it improves organizational or individual performance.
Retention should be based on performance, with inadequate performance corrected where possible and employees separated only when performance remains insufficient.
Privacy and constitutional rights must be respected, and employees are protected from coercion for partisan political purposes.

These principles apply to both covered and uncovered employees. Even an at-will employee cannot legally be denied a promotion because of political affiliation or punished for exercising constitutional rights as a citizen.¹

Political Activity

Arizona state employees can vote, hold political opinions, and participate in political activity on their own time. What they cannot do is use their official position to influence elections or coerce other employees into political activity. Violating that restriction is itself a listed ground for discipline of covered employees under ARS 41-773.¹

1
Arizona Legislature. Arizona Code 41-742 – State Personnel System; Covered and Uncovered Employees; Application; Exemptions
2
Arizona Legislature. Arizona Code 41-743 – Powers and Duties of the Director
3
Arizona Legislature. Arizona Code 41-773 – Causes for Dismissal or Discipline for Employee in Covered Service
4
Arizona Legislature. Arizona Code 41-782 – Powers and Duties of the State Personnel Board
5
Arizona Legislature. Arizona Revised Statutes 41-783 – State Personnel Board
6
Arizona Legislature. Arizona Revised Statutes 38-532 – Prohibited Personnel Practices; Whistleblower Protection
7
Arizona Legislature. Arizona Revised Statutes 41-1463 – Unlawful Employment Practices