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In November 2016, Arizona voters passed a ballot initiative (Proposition 206) for a statewide sick time law and annual increases to the minimum wage. The new law, entitled the Fair Wages and Healthy Families Act, takes effect on July 1, 2017. The purpose of this article is to provide an overview of the law’s paid sick time requirements and the steps employers should be taking to ensure compliance with those requirements.
Take note that the following information is intended as a summary only. Employers are strongly encouraged to seek legal counsel should they have additional questions regarding the new law’s requirements. Additionally, employers should be aware that certain requirements may be subject to changes or further clarification as the courts and the Industrial Commission provide additional guidance on the new law.
What is Paid Sick Time?
The new law requires employers to provide paid sick time to all full-time, part-time, and temporary employees. Paid sick time, which must be compensated at the employee’s current pay rate, may be used for the following reasons:
The law broadly defines “family member” to include children and stepchildren of any age, parents and stepparents, spouses and domestic partners, grandparents, siblings, in-laws, and other individuals related by either blood or affinity whose close association with the employee is the equivalent of a family relationship.
What Arizona employers are subject to the paid sick time requirements?
Virtually all employers, including small businesses, are subject to the law’s requirements. State and federal employers are exempt.
How much sick time does the law provide employees?
Regardless of the size of the employer, employees must accrue paid sick time at the rate of no less than one hour for every 30 hours worked.
Employees working for employers with 15 or more employees are entitled to accrue and use up to a maximum of 40 hours of paid sick time per year.
Employees working for employers with less than 15 employees are entitled to accrue and use up to a maximum of 24 hours of paid sick time per year.
Accrual of paid sick time begins July 1, 2017. Employees may use paid sick time as soon as it is accrued; however, employers may require employees hired after July 1, 2017 to wait 90 calendar days after the start of employment before using accrued paid sick time.
What if an employer already provides paid time off to employees?
If employers already have policies that provide paid time off in an amount that meets or exceeds the law’s minimum requirements (and that can be used for the same purposes specified by the law), they are not required to provide additional paid sick time to employees.
Additionally, the law does not prohibit or discourage employers from implementing more generous paid leave policies, i.e., providing employees with paid time off above the law’s minimum requirements.
What if an employee has unused paid sick time at the end of the year?
The new law provides employers with two options regarding an employee’s accrued, unused paid sick time:
Regardless of what option an employer chooses, employees are still only entitled to use the amount of paid sick time required under the law (up to a maximum of 40 hours per year) unless the employer has provided a higher limit.
Employers are not required to pay an employee for any accrued, unused paid sick time upon termination of the employee’s employment. If the employee is rehired by the employer within nine months of the termination of employment, however, the employee’s previously-accrued paid sick time must be reinstated.
How does an employee request use of paid sick time?
Employees may submit requests to use paid sick time orally, in writing, electronically, or by any other means acceptable to the employer. When the need to use paid sick time is foreseeable, an employee must make a good faith effort to provide advance notice and should attempt to schedule such time in a manner that is not unduly burdensome to the employer’s operations. When the need to use paid sick time is not foreseeable, an employer may only require advance notice if it has previously given the employee a written policy outlining the procedures for providing advance notice.
Employers cannot require that employees find a replacement worker when requesting use of paid sick time.
Can employers require employees to document or discuss the details of a need to use paid sick time?
In the event that an employee uses paid sick time for three or more consecutive work days, employers may require reasonable documentation that the paid sick time was used for one of the reasons specified under the law.
Employers cannot require employees to specify the relevant health issue or the details of domestic violence, sexual violence, abuse, or stalking that gave rise to the need to use paid sick time.
Are employers required to give employees notice of their rights under the new law?
At the commencement of an employee’s employment or by July 1, 2017, whichever is later, employers must provide employees written notice of the following:
Industrial Commission Labor Department
800 West Washington Street
Phoenix, Arizona 85007
The notice should be posted alongside other required workplace notices/posters.
Are there other recordkeeping requirements?
Employers must provide employees with the following information either in or on an attachment to the employee’s paycheck:
What are the consequences for failing to comply with the law’s requirements?
The law prohibits discrimination and retaliation against employees who use or request paid sick time. Paid sick time counts as a protected absence and cannot lead to any disciplinary or adverse action against an employee. The law creates a rebuttable presumption that any adverse employment action taken within 90 days of an employee’s use of paid sick time is retaliatory. An employer must show by clear and convincing evidence that the adverse employment action was not in retaliation for the employee’s use of paid sick time.
Employers who fail to comply with the law’s requirements are subject to the following:
What should employers do to prepare for the new law?