Arizona Proposition 206 | Earned Paid Sick Time

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Proposition 206, the Fair Wages and Healthy Families Act (Act), was approved by Arizona voters and established a new state minimum wage and entitles employees to accrue earned paid sick time. The new state minimum wage became effective on January 1, 2017 and earned paid sick time requirements become effective on July 1, 2017. See the Industrial Commission of Arizona’s website for details.

What is earned paid sick time?
Earned paid sick time is 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.

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.

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.

How is the accrual of earned paid sick time calculated for exempt employees?
An employee who is exempt under the Fair Labor Standards Act is presumed to have worked 40 hours per workweek, unless the employee’s normal workweek is less than 40 hours. In this case, accrual of earned paid sick time is based on the employee’s normal workweek.

Does the Act exempt any professions or salary ranges from its earned paid sick time provisions?
No. The Act does not exempt any professions or ranges of salary from the earned paid sick time provisions.
If an Arizona employer’s employees work outside of Arizona, are those employees entitled to earned paid sick time?

The “Act” does not address this issue. Additional legislative and/or judicial guidance is possible. Absent additional guidance, the Industrial Commission does not intend to enforce the Act against employers whose employees work outside of Arizona.

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 employeesEmployees 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.

What is a “year,” for earned paid sick time purposes?
Under the Act, a “year” is defined as a regular and consecutive 12 -month period as determined by the employer. An employer may, therefore, designate its “year” as it sees fit (for example: calendar year, fiscal year, year from an employee hire date, etc.).

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