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Top 10 Things to Know about the New Earned Paid Sick Time Law in Arizona

By Cristina Garza

Arizona has updated their laws regarding employee sick time via Proposition 206, the Fair Wages and Healthy Families Act. This change goes into effect July 1, 2017, and employers must comply regardless of size or business structure. While there is a lot of information to digest, here you will find the top 10 nuggets of information provided by the State of Arizona. Additional guidelines can be located here.

 

Top 10 Things to Know about the New Earned Paid Sick Time Law in Arizona

1. What is earned paid sick time? 

Earned paid sick time is sick time accrued by an employee that is compensated at the same hourly rate and with the same benefits, including health care benefits, as the employee normally earns during hours worked. This is not vacation time, for which Arizona does not currently have a requirement, but sick time. 

2. When can employees begin accruing earned paid sick time?

Employees can begin accruing earned paid sick time at the commencement of employment or July 1, 2017, whichever is later.

3. Is earned paid sick time vacation time? 

No, this is not vacation time and must be used for sick time only.

4. What can earned paid sick time be used for?

Employees may use earned paid sick time for themselves or for family members (see Arizona Revised Statutes § 23-373 to see who qualifies as a family member) in the following circumstances:

  • Medical care or mental or physical illness, injury, or health condition;
  • A public health emergency; (see Arizona Revised Statutes § 23-373 for more information about what qualifies as a public health emergency) ; and
  • Absence due to domestic violence, sexual violence, abuse, or stalking.

5. How much earned paid sick time must an employer offer an employee?

For employers with 15 or more employees: Employees must accrue a minimum of one hour of earned paid sick time for every 30 hours worked, but employees are not entitled to accrue or use more than 40 hours of earned paid sick time per year, unless the employer selects a higher limit.

For employers with fewer than 15 employees: Employees must accrue a minimum of one hour of earned paid sick time for every 30 hours worked, but they are not entitled to accrue or use more than 24 hours of earned paid sick time per year, unless the employer sets a higher limit.

6. How should an employer determine how many employees it has for purposes of the earned paid sick time laws?

The Fair Wages and Healthy Families Act (the “Act”) counts everyone performing work for compensation, whether full-time, part-time, or on a temporary basis, as an employee. For purposes of determining the number of employees, an employer has 15 or more employees if it maintained 15 or more employees on the payroll for some portion of a day in each of 20 different calendar weeks (the weeks do not have to be consecutive) in the current or preceding year.

7. How soon can an employee begin using accrued earned paid sick time?

An employee may use earned paid sick time as soon as it is accrued. However, an employer may require an employee hired after July 1, 2017 to wait 90 calendar days after the start of employment before using accrued earned paid sick time.

8. Is there a new hire probation period before earned paid sick leave begins to accrue?

No. Employees must accrue earned paid sick leave immediately upon hire. The employer, however, may require that employees hired after July 1, 2017 wait 90 days before they can use earned paid sick time.

9. Must an employer carry forward balances of earned paid sick time at the end of a year to the next year?

The Fair Wages and Healthy Families Act provides that earned paid sick time shall be carried over to the following year, subject to usage limitations based on employer size. Alternatively, in lieu of carry over, an employer may pay an employee for unused earned paid sick time pursuant to A.R.S. § 23-372(D)(4). Absent statutory or judicial guidance, the Industrial Commission is proposing rules consistent with the following: An employee of an employer with 15 or more employees may carry over to the following year a maximum of 40 hours of unused earned paid sick time. An employee of an employer with fewer than 15 employees may carry over to the following year a maximum of 24 hours of unused earned paid sick time. Alternatively, in lieu of carry over, an employer may pay an employee for unused earned paid sick time pursuant to A.R.S. § 23-372(D)(4). Carry over shall not affect accrual or use rights under the Act.

10. What kind of posting and record keeping is required by Arizona’s earned paid sick time laws?

Unless otherwise exempted from the posting and recordkeeping requirements, employers subject to Arizona’s earned paid sick time laws are required to comply with notice, posting, and recordkeeping requirements pertaining to earned paid sick time. 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) maintaining payroll records in accordance with Arizona’s statutes and rules

 

TLDR

 So, what do you need to do? 

  • If Accountingprose processes your company's payroll, we will implement this automatic accrual via Gusto as of 07/01/17.
  • If Accountingprose does not process your company's payroll, please reach out to your payroll provided to implement this change.

 

Bonus Round

 What happens if an employer violates The Fair Wages and Healthy Families Act’s recordkeeping, posting, or other requirements?

An employer who violates The Fair Wages and Healthy Families Act’s recordkeeping, posting, or other requirements is subject to a civil penalty of at least $250 for the first violation and at least $1000 for each subsequent or willful violation.

If you are not currently working with Accountingprose, give us a shout! We can help keep you in compliance without breaking the bank!