Fair Wages and Healthy Families Act

Proposition 206, passed by Arizona’s legislature in November of 2016, mandates new rules for the issuing and use of paid sick leave for all Arizona employees with the exception of Arizona and Federal government employees. The following points should be considered and implemented:

  • Employees begin accruing sick leave on July 1, 2017, or on their date of hire, whichever is later. You may require a 90-day probationary period for employees hired after July 1.
  • Employees accrue one hour of sick leave per 30 hours worked. Exempt employees are considered to work 40 hours per week, unless a normal workweek is shorter.
  • If your business has 15 or more employees, they can accrue up to 40 hours of sick leave per year. If 14 or fewer employees, they can accrue up to 24 hours per year. Company policy may allow for greater amounts than this.
  • You may choose two ways to treat unused sick leave:
      • Unused sick leave may carry over to and be used in the following year, but the annual usage requirements still apply.
      • You may pay the unused hours at the end of the year, as long as the minimum annual hours (24/40} are available to the employee at the beginning of the year.
    • You are not required to pay for unused sick pay hours for employees who retired, resigned, or were terminated.
    • Permissible uses of sick time include: medical care for mental or physical illness employee or for a family member, closure of business or school due to public health emergency, addressing domestic violence issues, sexual abuse, or stalking, and meeting with an attorney and arranging for shelter or safe housing.
    • Notifying the employer of sick leave is not required prior to leave that is not foreseeable. Otherwise, an employee must make a good faith effort to provide notice to the employer to not unduly disrupt operations. You may require proof or documentation of sick leave only after three straight days of leave taken.
    • You may not require an employee to find a replacement or retaliate against the employee for sick time use.
    • Reporting requirements include, on each regular paycheck, a summary of sick time available, amount of sick time used that year, and the amount of pay received as earned sick time.
    • You must provide all employer contact information in writing upon hire and maintain payroll records for four years.
    • Notice to employees can be provided with an official poster in a conspicuous place. See www.azica.gov for a sample poster.
    • Implementation of these rules should include revision of your current policies, and determining and communicating the following information to your employees: method of determining the sick pay year, the smallest increment of time to record/report, method of providing payroll information, the cash-out or carryover method, and how the new rules will affect your current sick leave/PTO plan.
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