(Almost) Everything You Need To Know
Prop 206 was challenged—will that prevent Arizona paid sick leave from going into effect on 7/1/17?
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No. On March 14, 2017, the Arizona Supreme Court struck down a challenge to Proposition 206, led by the Arizona Chamber of Commerce and others. The court’s decision means that the law stands and employers should plan for it to go into effect on July 1, 2017. Currently, no other challenges to the law are expected.
Which employers are affected by the paid sick time law?
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All employers in Arizona are affected by the Arizona paid sick leave law. Arizona law broadly defines “employer” as any corporation, proprietorship, partnership, joint venture, limited liability company, trust, association, political subdivision of the state, individual or other entity acting directly or indirectly in the interest of an employer in relation to an employee. It does not include the state of Arizona, or the United States government.
Are there exemptions?
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Not for paid sick leave. The sick leave law was passed as part of Prop 206, which also included the minimum wage increase. There are a few exemptions in the minimum wage law, but those do not apply to the paid sick leave law. For more information about the minimum wage law, go here.
When do my employees begin accruing paid sick leave? And when can they begin using it?
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For your current employees, they will begin accruing sick time on July 1, 2017. If you choose to provide sick time using the lump sum method rather than tracking accrual, then their full yearly lump sum allotment needs to be granted to them on July 1, 2017.
For anyone hired after July 1, 2017, accrual begins on the date of hire. However, you do not need to allow employees to use their accrued sick time until they complete 90 calendar days of employment. Likewise, if you are using the lump sum method, you can wait until completion of 90 calendar days of employment to provide their yearly lump sum allotment.
For anyone hired after July 1, 2017, accrual begins on the date of hire. However, you do not need to allow employees to use their accrued sick time until they complete 90 calendar days of employment. Likewise, if you are using the lump sum method, you can wait until completion of 90 calendar days of employment to provide their yearly lump sum allotment.
What are the rules for paid sick leave accrual?
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If you have 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.
- 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.
Do I need to roll over unused paid sick time to the next year?
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Employers using the accrual method must roll over earned sick time that is unused at the end of a calendar year. However, you are able to cap the roll over amount to the annual accrual amount (24 hours or 40 hours per year depending on your size). And, despite these rolled over hours, you are able to limit the employee to only using the maximum yearly amount (24 hours or 40 hours per year depending on your size). If you are using an accrual method, the only way to avoid a roll over is if you pay out the unused time at the end of the year and start using the lump sum method for the subsequent year.
Employers who are using the lump sum method can avoid the roll over requirements. Employers who provide their employees with the maximum annual accrual amount (24 hours or 40 hours per year depending on your size) can either pay out the unused time at the end of the year or consider the unused time forfeited. At the start of the subsequent year, the employee must again be granted a lump sum of the maximum annual accrual amount.
Employers who are using the lump sum method can avoid the roll over requirements. Employers who provide their employees with the maximum annual accrual amount (24 hours or 40 hours per year depending on your size) can either pay out the unused time at the end of the year or consider the unused time forfeited. At the start of the subsequent year, the employee must again be granted a lump sum of the maximum annual accrual amount.
What can paid sick leave be used for?
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Employees may use earned paid sick leave for themselves or to take care of family members, for a broad variety of reasons. In summary, sick leave can be used for the following:
Also note that a “family member” is broadly defined in the law, and can even include someone who is not an actual relative. If you have questions, please see the definition of family member.
- 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.
Also note that a “family member” is broadly defined in the law, and can even include someone who is not an actual relative. If you have questions, please see the definition of family member.
Does Arizona’s Fair Wages and Healthy Families Act law impose new posting, recording, and recordkeeping requirements?
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Yes. Both the minimum wage and paid sick leave portions of the law require posted notifications in the workplace, in addition to other requirements.
For Arizona paid sick leave, the requirements include: (1) posting earned paid sick time notices in the workplace; (2) providing employees with the employer’s business name, address, and telephone number in writing upon hire; (3) providing employees with a notice that informs them of their rights and responsibilities under the Fair Wages and Healthy Families Act; and (4) ensuring payroll records are maintained per AZ rules and statutes.
Employers must give employees written notice of the following at the commencement of employment or by July 1, 2017, whichever is later:
Separate recordkeeping requirements are permitted for employees on fixed schedules and employees who are compensated on a salary basis at a rate that exceeds the minimum wage required under the Fair Wages and Healthy Families Act. These employees must qualify under the federal Fair Labor Standards Act (FLSA) as a bona fide exempt executive, administrative, or professional employee.
The Industrial Commission may issue regulations on employee notice requirements and/or update their model notices, so be sure to work with a qualified advisor or check the state website for updates.
For Arizona paid sick leave, the requirements include: (1) posting earned paid sick time notices in the workplace; (2) providing employees with the employer’s business name, address, and telephone number in writing upon hire; (3) providing employees with a notice that informs them of their rights and responsibilities under the Fair Wages and Healthy Families Act; and (4) ensuring payroll records are maintained per AZ rules and statutes.
Employers must give employees written notice of the following at the commencement of employment or by July 1, 2017, whichever is later:
- Employees are entitled to earned paid sick time;
- The amount of earned paid sick time that employees are entitled to accrue;
- The terms of use guaranteed by Arizona’s earned paid sick time laws;
- That retaliation against employees who request or use earned paid sick time is prohibited; and
- That each employee has the right to file a complaint if earned paid sick time is denied by the employer or the employee is subjected to retaliation for requesting or taking earned paid sick time.
- The amount of earned paid sick time available to the employee;
- The amount of earned paid sick time taken by the employee to date in the year; and
- The amount of pay time the employee has received as earned paid sick time.
Separate recordkeeping requirements are permitted for employees on fixed schedules and employees who are compensated on a salary basis at a rate that exceeds the minimum wage required under the Fair Wages and Healthy Families Act. These employees must qualify under the federal Fair Labor Standards Act (FLSA) as a bona fide exempt executive, administrative, or professional employee.
The Industrial Commission may issue regulations on employee notice requirements and/or update their model notices, so be sure to work with a qualified advisor or check the state website for updates.
How do exempt employees accrue sick time?
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It is assumed that an exempt employee works 40 hours per week for purposes of sick time accrual. If the employee’s normal work week is less than 40 hours, then sick time accrues based on the number of hours they normally work per week.
How do I determine the amount of sick pay for commissioned employees?
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The hourly rate for commissioned employees should be determined in the following order of priority:
- (1) The previously agreed upon hourly rate of pay by the employer and the employee.
- (2) The known wages for the period of time in which earned paid sick leave is used, divided by the number of hours of paid sick leave time used.
- (3) A reasonable estimate of wages for the period of time in which earned paid sick leave is used, divided by the number of hours of paid sick leave time used.
- (4) The hourly average of wages earned during the previous 90 days, or if that rate is not available, then during the previous 365 days. For examples and more details regarding paid sick leave for commissioned employees, please see the Industrial Commission of Arizona’s FAQ.
How do I determine the amount of sick pay for employees who have varied pay?
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For employees with multiple rates of pay, the amount of sick pay is the known hourly rate of pay the employee would have earned for each hour of paid sick time used, or if that hourly rate is not known, then the weighted average of all hourly rates of pay during the previous pay period.
For examples and more details regarding paid sick leave for employees with varied pay, please see the Industrial Commission of Arizona’s FAQ.
For examples and more details regarding paid sick leave for employees with varied pay, please see the Industrial Commission of Arizona’s FAQ.
Are independent contractors subject to the new law?
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No, the requirements under Proposition 206 do not apply to independent contractors.
Important Note: Independent contractors must be properly classified. If it is later determined that one or more of your independent contractors should have been classified as an employee, you could face significant fines and penalties through state and government agencies as well as civil actions from your employee. Contact a qualified advisor or employment law attorney to check your classifications are correct.
Important Note: Independent contractors must be properly classified. If it is later determined that one or more of your independent contractors should have been classified as an employee, you could face significant fines and penalties through state and government agencies as well as civil actions from your employee. Contact a qualified advisor or employment law attorney to check your classifications are correct.
Can I require employees to find someone to cover their shift?
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No. Employers cannot require that employees find (or even try to find) a replacement for their shift when they use sick time.
Can I loan employees sick time before it’s earned?
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Yes. Employers may loan employees sick time before it’s earned, at your discretion. But be cognizant that you should manage all employees consistently.
Can I require an explanation for why an employee needs to take a day off using sick pay?
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No. Although an employer can require reasonable documentation of absences of three of more consecutive work days, an employer may not require that an employee specify the relevant health condition or the details of domestic violence, sexual violence, abuse, or stalking. See next question.
Can I require documentation when employees use paid sick time?
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Yes, but only if an employee uses earned paid sick time on three or more consecutive workdays. At that point, an employer can require reasonable documentation that the earned paid sick time was used for purposes permitted by Arizona’s earned paid sick time laws. For further information about permitted uses of earned paid sick time, see What can earned paid sick time be used for?
What kind of documentation can I ask for?
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For an absence of three or more consecutive workdays, reasonable documentation includes documentation signed by a health care professional indicating that the earned paid sick time is necessary.
In the case of domestic violence, sexual violence, abuse or stalking, the following documents are considered reasonable:
In the case of domestic violence, sexual violence, abuse or stalking, the following documents are considered reasonable:
- A police report
- A protective order, injunction against harassment, general court order, or other evidence from a court or prosecuting attorney
- A signed statement from a domestic violence or sexual violence program, or victim services organization affirming that the employee or employee’s family member is receiving services related to domestic violence, sexual abuse, or stalking
- A signed statement from a witness advocate concerning services from a victim services organization affirming that the employee or employee’s family member is receiving services related to domestic violence, sexual abuse, or stalking
- A signed statement from an attorney, member of the clergy, or a medical or other professional affirming that the employee or employee’s family member is receiving services related to domestic violence, sexual abuse, or stalking
- An employee’s legible, written statement concerning status of the employee or the employee’s family member as a victim of domestic violence, sexual violence, abuse, or stalking that signals the employee’s identity and (if applicable) relationship to the family member
Can I consider absences for which an employee used sick pay when issuing a disciplinary action?
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No, employers cannot count a sick day towards an adverse action, including termination or disciplinary action.
What happens at separation from employment?
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Employers are not required to pay an employee for unused sick time upon separation. However, if the employee is rehired within 9 months, any unused sick time must be reinstated.
What if I have questions?
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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. We recommend contacting the Industrial Commission's Labor Department at 602-542-4515 or visiting the State Bar of Arizona's website to help find a lawyer near you.
If you are a dental or medical practice, or associated with those, and would like help with your HR, you can contact CEDR by calling 866-414-6056 or emailing info@cedrsolutions.com
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.