Tuesday evening, Arizona voters approved Proposition 206 by a wide margin. My colleague, John Lomax, has provided a helpful summary of the new law affecting paid sick leave.
The proposition will raise the minimum wage to $10.00 per hour in January 2017, rising to $12.00 per hour by 2020, and indexed to inflation thereafter. The measure also included paid sick time obligations for employers to provide employees. Here is a summary of the new law:
- For large employers (more than 15 employees), the Paid Sick Time (PST) requirements extend to both hourly and salaried employees.
- The accrual of PST should begin no later than July 1, 2017, so companies have a little time to plan further. Note, for employees hired after July 1, 2017, companies can require them to work 90 days before they can use the accrued PST.
- The accrual is one hour for every 30 hours worked. The proposition allows companies to assume salaried, exempt employees work 40 hours a week.
- There is a cap as 40 hours (or 5 days) of accrued PST. The proposition provides the employee is not entitled to accrue/use more than 40 hours per year. Once the PST are fully accrued (at 1200 hours), the employer does not need to accrue additional time. The cap for small employers is 24 hours.
- The proposition allows employees to carry over PST, but subject to the limitations on usage and accrual. If the company pays out the earned PST at the end of the year and grants the full allotment of PST for the following year, then there does not need to be carryover.
- The company does not need to pay out the PST on termination of employment, but if the same employee is rehired within 9 months of termination, the accrued, unused PST needs to be reinstated and the employee can use that balance immediately on rehire.
- Companies are required to have a notice that outlines what is available to employees, how to use it, etc.
- Companies cannot count use of PST as an absence that leads to discipline or termination.
- The company must permit employees to use PST in the smaller of hourly increments or the smallest increment that its payroll system uses to account for absences or other time.
- Companies cannot require employees, as a condition of using PST, to find a replacement worker.
- Companies cannot retaliate against employees for using or seeking to use PST.
- Companies are required to keep records showing compliance for four years.