What is Proposition 206?
Proposition 206, the Fair Wages and Healthy Families Act, was a ballot initiative approved in November 2016. This law requires all Arizona employers to provide paid sick leave, effective July 1, 2017. The law also raised the minimum wage as of January 1, 2017, with additional scheduled increases in the coming years. For more information on the minimum wage laws, see the Industrial Commission of Arizona website. This website will focus on the paid sick leave component of these Arizona labor laws.What Are the Details of Arizona's Paid Sick Leave Law?
Here are the basics:
Arizona employees will begin accruing paid sick time beginning on July 1, 2017 or on the employee’s start date, whichever comes later.
Employees may use their accrued sick time for themselves or to take care of family members.
Sick leave can be used for the following:
- Medical care or mental or physical illness, injury, or health conditions.
- Circumstances relating to public health emergency or communicable disease exposure.
- Absence due to domestic violence, sexual violence, abuse, or stalking.
For employers with 15 or more employees:
- Employees accrue 1 hour of paid sick time for every 30 hours worked.
- Employees may not use more than 40 hours of paid sick leave per year, unless the employer allows a higher limit.
For employers with fewer than 15 employees:
- Employees accrue 1 hour of paid sick time for every 30 hours worked.
- Employees may not use more than 24 hours of paid sick leave per year, unless the employer allows a higher limit.
Employees begin accruing earned paid sick time upon hire. However, employers may require that employees hired after July 1, 2017 wait 90 days after their date of hire before using it.
As an alternative to accrual, employers may grant the total annual amount for the year (24 or 40 hours) in a lump sum on July 1st, or on the employee’s 90th day of employment, and then annually thereafter. While you still have to track sick time used and paid out, this avoids the complexity of tracking accrual amounts.
Employees may request to use sick time orally, in writing, by electronic means, or by any other means acceptable to the employer.
If the employee has unused earned sick time at the end of the year, up to the employee’s total yearly eligibility amount (24 or 40 hours) must be rolled over into the next year. The only exception to this is if the employer is using the lump sum method of providing the full amount of earned sick time at the beginning of the year. If so, the employer can pay out unused time at the end of the year or consider the unused time to be forfeited.
How Does it Affect You?
The Fair Wages and Healthy Families Act affects nearly all non-government employers in Arizona. Some small employers are exempt from the minimum wage law, but those exemptions do not apply to the paid sick leave act. If you are a private employer, the sick leave law does apply. In addition to adjusting your employee policies and providing paid sick leave, you will need to post required notices in your office, alert employees of their rights, and meet various other requirements (see next section for specifics). The amount of paid sick leave available, the amount used, and the amount paid for the year must also be reported to the employee each pay period, so you also need secure and robust timekeeping and payroll management to ensure all records are accurate, retained, and reported properly. We recommend Payday HCM for payroll and timekeeping —— many other providers are not compliant. Records must be kept for at least 4 years, and employers cannot fall short on this detail! If you fail to maintain the proper records, there is a presumption that you did not comply with the law. Fines and penalties are assessed for noncompliance. If you take any adverse action (for example - termination, demotion, pay cut) within 90 days of an employee asserting any right under this act, it’s presumed that you are retaliating against the employee for asserting their sick leave rights. Compliance is the only viable option.What Must You Do To Comply?
Employers are required to comply with notice, posting, and recordkeeping requirements for paid sick time, including:
- Posting notices in the workplace of employees’ rights under paid sick leave laws;
- Providing employees with the employer’s business name, address, and telephone number in writing upon hire;
- Providing employees, by 7/1/17 and upon hire thereafter, with a notice that informs them of their rights and responsibilities under the Fair Wages and Healthy Families Act (same notice as posted); and
- Maintaining payroll records in accordance with Arizona’s statutes and rules.
Notices can be found on the Industrial Commission's website in both English and Spanish.
Employers must also provide the following, either in an employee’s paycheck or in an attachment to it:
- The amount of earned paid sick leave available to the employee;
- The amount of earned paid sick leave taken by the employee to date that year; and
- The amount of paid time the employee has received as earned paid sick leave.
Most importantly, you need to create a new time off policy that incorporates compliant paid sick leave into your benefits package. If you already provide paid time off, such as vacation or sick days, you may only need to adjust your current policy to ensure it addresses the minimum requirements of the law.
Note: It is not advised to include protected paid sick time in with other additional paid time off, such as in a PTO bank. Doing this makes it difficult to distinguish which time is which, thereby subjecting all your time off benefits to the same risks and restrictions as provided by the paid sick time laws.
Some other details you may not know about AZ paid sick time:
- Employers can require a good faith effort to provide advance notice of absence when foreseeable, and to take paid sick time in a way that does not unduly disrupt operations. (But we don’t recommend denying a request!)
- You can have a written policy about how employees are to notify you of an unforeseeable absence (i.e., notify your direct supervisor), however you cannot limit the method by which an employee is able to provide you with notice of the need to use paid sick time (an employee is permitted to use any available option, to include oral, written, or electronic methods).
- Paid sick time can be used in 1 hour increments (or smaller, if you allow smaller increments for other types of absences).
- Employers cannot require a doctor’s note or other reasonable documentation unless 3 or more consecutive days are used.
- You cannot require specific details as to the reason for absence, and if the employee provides details, you are required to keep them confidential.
- You cannot require employee to find a replacement for their shift.
Why Did We Create This Page?
CEDR HR Solutions is a family-owned business with 35+ employees located in Tucson, AZ. As a business which provides HR support to 1600+ medical and dental practices nationwide, in addition to being an Arizona employer ourselves, we’ve been keeping a very close eye on the new regulations and guidance from the state. The conclusion? Arizona’s new Paid Sick Leave laws are very complicated, and following these rules and writing policies for your handbook is not as easy as some people think it is. As such, we wanted to offer this information, distilled down to its basics, plus great resources like a webinar and sample policy, to help our neighbors and friends prepare for these changes and compliant. This website is our gift back to the Arizona community. We have compiled several resources for you on this website to help you better understand the new laws and how to comply with them. Please use this website with our good wishes. And be sure to SHARE THIS PAGE AND RESOURCES with every AZ employer you know. The more knowledgeable we all are, the better. If you are a medical or dental practice, or associated with those, and you have questions or would like some help with your HR, get in touch with CEDR or visit our Dental and Medical page.Disclaimer:
The information on this website is general guidance and is not legal advice or a substitute for working with a qualified human resources professional or employment law attorney. The information is believed to be current as of the date of the website. As the state is expected to issue regulations that will provide further guidance on implementing the earned sick leave law, and may update their other resources and/or amend the law, employers are encouraged to check the Industrial Commission website for updates prior to implementing any policy and should work directly with a knowledgeable advisor.