In the absence of paid family or paid sick leave provisions in federal law, a growing number of states, including California, New York, Washington, and Arizona have begun to fill the gap. Stay tuned this week as we discuss major developments in the 2017 leave landscape, and how Zenefits can help you comply with the new regulations in your state or city!
In November 2016, voters enacted Arizona Prop 206, raising the minimum wage from $8.05 to $10.00 per hour, and requiring nearly all Arizona employees earn paid sick time. As the law takes effect on July 1, 2017, Arizona becomes 1 of 8 states, as well as Washington D.C., that provide mandatory paid sick leave. Keeping track of sick leave based on hours worked by each employee is complicated and fraught with risk, given the penalties for failing to properly account for and allow employees use of their earned sick time. Zenefits can help get you in compliance as soon as possible, with our hourly accrual tool, webinars, and team of qualified HR Specialists. Read on for more information on the law and its potential impact on your workplace.
Proposition 206, The Fair Wages and Healthy Families Act (the “Act”), applies to all employees performing work for pay, including full-time, part-time, and temporary employees, with the exception of state and federal employees. Significantly, unlike the minimum wage requirement, this section of the Act does not contain an exemption for small businesses, which means that even employers that are exempt from the minimum wage requirement will still be required to provide earned paid sick time.
“Earned paid sick time” is defined in the Act as sick time accrued by an employee, during which they receive the same hourly compensation and benefits as they would during active employment. Employees will begin accruing their earned paid sick time on either July 1, 2017 or their time of employment, whichever comes later.
Employees may take earned paid sick time for their own conditions or to care for family members in case of the following:
Here’s a quick overview of some of the major requirements employers must put in place to comply with the Act. You can find more information here.
1. Accrual Requirements: For the purposes of earned paid sick time, the Act does not differentiate between annual and partial-year employees. The amount of sick time an employer must offer, as well as the accrual caps, are based on the size of their Arizona workforce.
2. Hourly Wages: An employer may not pay employees less than the minimum wage per hour of earned paid sick time.
3. Notice Requirements:
4. Waiting Period: Employees will accrue earned paid sick leave immediately upon hire, and can also use their sick time as soon as it is accrued. However, employers may require employees hired after July 1, 2017 to wait 90 calendar days after their employment date to use their accrued paid sick time.
5. Carryover Requirements: Under the Act, earned paid sick time will carry over to the following year, subject to the 40 and 24 hour limitations (see above). However, employers also have the option of paying employees for their unused earned sick time at the end of the year, instead of carrying it over.
6. Recordkeeping: Employers must comply with all the recordkeeping requirements in the Act, including:
If your company’s paid leave policy provides sick leave that is the same as or greater than the amount required by the Act, and can also be taken for the same purpose, and under the same conditions, then you may not need to provide additional sick leave time. However, you should consult your attorney before making this determination or any other changes based on the Act.
NOTE: Employers always have the option to offer more generous earned paid sick time policies than those required by the Act.
Employers who fail to provide earned sick time will be required to repay employees the wages owed to them with interest, as well as an additional amount that equals twice the underpaid wages. Employers who fail to maintain payroll records could face penalties of at least $250 for the first violation, and $1000 for each violation thereafter. Employees may also file complaints against their employer with the Labor Department of the Industrial Commission of Arizona. Discover how easy managing time-related details for your business is with Zenefits Time and Attendance here:
Stay in the know about upcoming leave requirements by following blog for a continued discussion of San Francisco and New York paid family leave provisions, and what you can do to prepare your business.
Finally, our Help Center is chock-full of imperative details on coverage, notice, and paid time off requirements. Interested in seeing Zenefits in action? Request a demo with one of our HR specialists today.