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about new law? Here’s how to make sure your business is compliant with Arizona’s mandatory paid sick leave



ust as Arizona businesses are settling into the new normal after the minimum wage was increased to $10 per hour in January, they’re getting hit with the second wave of the voter-approved Fair Wages and Healthy Families Act. While the first part of Proposition 206 raised the minimum wage, the second part — which went into effect July 1 — provides paid sick leave for Arizona workers. “Employees must accrue paid sick leave at a rate of one hour of paid sick leave for every 30 hours worked,” according to Jessica L. Post, a director at Fennemore Craig. “For employers with 15 or more employees, the accrual cap is 40 hours per year. For employers with fewer than 15 employees, the accrual cap is 24 hours per year.” Employers can offer more generous leave, but that is what is required under the Act, Post says. “The law is intended to benefit the lives of approximately 30 percent of Arizona’s


AB | July - August 2017

workforce who work for minimum wage and/or do not earn paid sick time,” says Jodi Bohr, a shareholder at Gallagher & Kennedy. “Those workers tend to work in fast food, restaurants or retail jobs. The potential unintended consequences will be increased automation to reduce those positions and increased prices.” Bohr says at least one food establishment she frequents has already imposed a Prop. 206 service charge at checkout. Nonnie L. Shivers, a shareholder at Ogletree Deakins, says the new law allows employees to accrue and use paid sick leave for their own illnesses, their family members’ sicknesses or public health emergencies. “Some employees may see no change if they already received more generous paid time off benefits from their employer,” Shivers says, “but new employees may be able to use sick leave sooner.” While the formula seems simple — one hour of paid sick leave for every 30 hours

worked — there are intricacies of the new mandate that employers need to address: • Each employee’s pay stub must list how much sick leave has been accrued, used and received. • Informational posters about the law must be displayed in a well-trafficked area, such as a copy room or break room. If you don’t follow these procedures, you may be hit with penalties by the Industrial Commission of Arizona and/or lawsuits. Despite the seemingly simple formula, there are significant grey areas that have many employers scratching their heads. “The grey areas are numerous and, in fact, the (Industrial Commission of Arizona) continues to update its own FAQs on the fly, demonstrating its own confusion with the law,” says John Alan Doran, a member at Sherman & Howard. “The greatest confusion will lie, no doubt, in the coordination of Arizona’s paid sick leave benefit with other leave-related laws,

AzBusiness magazine July/August 2017  

Don’t miss reading about this year’s class of the Most Influential Women in Arizona Business. This issue spotlights the people and associati...