No employer may withhold or divert any portion of an employee's wages unless one of the following applies: 1. No employer may withhold or divert any portion of an employee's wages unless: 1.All wages, salaries, bonuses or other compensation paid for services performed in Arizona are subject to state income tax withholding, with exceptions. In general, Arizona state law says that an employer cannot withhold an employee's wages. In addition to the federal income tax withholding form, W4, each employee needs to fill out an Arizona State income tax withholding form, A4. Under statute 352 of the Arizona Wage Act, employers are prohibited from withholding wages from their employees except under certain limited circumstances.