Arizona voters approved the Minimum Wage and Paid Sick Time Off Initiative, better known as Proposition 206, in November of 2016. Proposition 206 immediately increased Arizona’s minimum wage to $10.00 per hour and requires Arizona employers to provide paid sick time to all employees. The minimum wage increase took effect January 1, 2017; however, the paid sick time does not go into effect July 1, 2017.
Since July 1st is almost here, we wanted to highlight some critical elements that need to be understood in order for businesses to implement policies that adhere to the new regulations. Proposition 206 states that employees of employers with 1 or more employees accrue at least one hour of earned paid sick leave for every 30 hours worked. However, employees’ annual accrual and use of sick leave is capped – 40 hours per year for employers with 15 or more employees, and 24 hours per year for employers with less than 15 employees. Salaried employees are presumed to work 40 hours per week for accrual purposes.
Proposition 206 created new categories for employees to use paid sick time, including:
- Employee mental or physical illness, injury or health condition;
- Time off related to abuse, stalking, sexual violence, or domestic violence of either the employee or the employee’s family member;
- The mental or physical illness, injury or health condition of a family member;
- When an unforeseen public health emergency forces the employee’s workplace to close, or the employee’s child’s school or daycare to close.
Proposition 206 broadly expanded the definition of a “family member” to include:
- A biological, adopted or foster child of any age, in addition, legal wards and children of a domestic partner are classified as a family member;
- The employee’s parents, including biological, foster, stepparents, adoptive parents, and legal guardians of the employee or the employee’s spouse or domestic partner;
- Spouse and domestic partners of the employee;
- Employee’s grandparents, grandchildren, or siblings of the employee or the employee’s spouse or domestic partner;
- Any and all other individuals related by either blood or affinity whose relationship or association with the employee is the equivalent of a family relationship.
It is important for businesses to note that if an employee leaves the job, regardless of the reason, employers are not required to pay out unused accrued paid sick leave time to the employee. However, if the same employer rehires the employee within nine months of the employee’s termination or resignation, the employee is entitled to have all previously accrued paid sick time reinstated.
Therefore, seasonal employees, who are fired and rehired within nine months, are entitled to all of their accrued paid sick leave time. Employees are entitled to roll over their unused paid sick leave time year to year; however, they are not allowed to exceed 40 or 24 hours, depending on the size of the employer.
Employers may use an existing paid time off policy to satisfy the law if it provides benefits at least as generous as Proposition 206, but that approach can be risky. Many employers are choosing to separate sick leave benefits to leave no doubt that their policy is legal.
Proposition 206 is complicated and can be tricky to implement. Contact Boreale Law, PLC and let us help you ensure your business is complying!