Paid Sick Time is Coming. Are You Prepared?

Arizona has joined a handful of states in enacting a mandatory paid sick time law.  Under Arizona Proposition 206, nearly all employers in Arizona will be required to offer employees mandatory “paid sick time” (“PST”) by July 1, 2017.  Unlike Arizona’s minimum wage laws, which exempt “small businesses,” PST requirements apply to all businesses regardless of size.

The amount of required PST accrual varies depending on the number of employees in the employer’s workforce.  For employers with 15 or more employees, employees must accrue a minimum of one hour of earned PST for every 30 hours worked for a maximum of 40 PST hours per year.  Employers with fewer than 15 employees must still offer 1 hour PST for every 30 hours worked, but can cap the accrual and use of PST at 24 hours per year.

Part-time and temporary workers and salaried workers are also covered by the law. Salaried employees are presumed to work 40 hours in each work week for purposes of calculating PST accrual, unless their normal work week is less than 40 hours, in which case their earned PST will accrue based on actual hours worked.

Generally, unused earned PST must be carried forward to the following year consistent with the accrual limits of the Act. Employers may forego this requirement by following the requirements of the applicable statute, which includes paying out any unused PST.  The law does not require, however, that PST to be paid out upon termination of employment so long as an employer maintains clear written policies informing employees that it will not pay out accrued and unused PST upon termination of employment.

Employees can use their PST hours for a variety of reasons, including personal mental or physical illness, injury, or health condition; the mental or physical illness, injury, or health condition of a family member; abuse, stalking, sexual violence, or domestic violence of either the employee or the employee’s family member; and/or, when a public health emergency causes either the employee’s workplace to close, or the employee’s child’s school or daycare to close.

The Act also imposes notice and recordkeeping requirements.  Employers are required to notify employees of their right to paid sick leave in English, Spanish, and any other language “deemed appropriate” by the Industrial Commission of Arizona.  In addition, employers must keep records of an employees’ accrual and use of PST for a period of four years.

Arizona employers should consult counsel to ensure its policies are appropriately updated to comply with new laws.  Employers should also note that the new law makes it unlawful for an employer to retaliate or discriminate against an employee for using accrued PST or exercising his or her rights under the Act.  Critically, if an employer takes any adverse action against an employee within 90 days of a person’s use of PST, the law provides a rebuttable presumption that the action was retaliatory.  Penalties for unlawful retaliation or discrimination are discretionary; however, the minimum penalty imposed will be $150 for each day the violation continued or until judgment is final.

Laura Pasqualone is an attorney at Lewis Roca Rothgerber Christie. LLP. She ‎practices primarily in the areas of employment law and business litigation. She regularly advises ‎employers on compliance with a wide variety of federal, state and local employment laws. Her practice ‎also consists in litigating cases brought under the Fair Labor Standards Act, the Family and Medical ‎Leave Act, Title VII of the Civil Rights Act, the Americans with Disabilities Act, and the Age Discrimination ‎in Employment Act. 

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