AZ SB1163

Expands protected classes in Arizona employment discrimination law to include gender identity, gender expression, and sexual orientation alongside existing protections for race, color, religion, sex, age, national origin, and disability.

Adds a religious organization exemption allowing faith-based employers and educational institutions substantially controlled by religious organizations to make employment decisions based on gender, gender identity, expression, or sexual orientation when the position directly relates to religious functions or education provision.

Prohibits employers from being required to retain or maintain records regarding an individual's or group's gender, gender identity, expression, or sexual orientation.

Updates employment practices provisions to prohibit discrimination in hiring, discharge, compensation, training programs, and job advertisements based on the newly protected characteristics of gender identity, gender expression, and sexual orientation.

Makes conforming changes to statutory language, replacing outdated terms with gender-neutral alternatives and clarifying the scope of existing employment discrimination protections.