Lubin & Enoch’s associate attorney, Kaitlyn Redfield-Ortiz, answers questions about Proposition 206, the “Arizona Minimum Wage and Paid Time Off” law.
Who does Proposition 206 affect?
Proposition 206 covers all private and municipal employers. Likewise, even temporary and part-time workers are considered “employees” entitled to paid sick time (“PST”).
Moreover, the new law includes “joint ventures” in its definition of “employer,” as well as any “entity acting directly or indirectly in the interest of an employer in relation to an employee.” A.R.S. § 23-371(G). The law is intended to cover nearly all employees in the state of Arizona.
Is it a total accumulation for sick/vacation of 40 hours adding up after 30 hours of work?
Yes. Employees of an employer with more than 15 employees will accrue a minimum of one hour of PST for every 30 hours they work, but employees cannot accrue or use more than 40 hours of PST per year, unless the employer selects a higher limit. Thus, a typical full-time employee who works 40 hours per week for 52 weeks per year will be capped at earning 40 hours of PST, rather than the 69 hours they would have otherwise accrued for each of their 30 hours worked.
When do the changes take effect?
The paid sick time provision of Proposition 206 is effective on July 1, 2017. The minimum wage was increased to $10 on January 1, 2017.
Employees begin to accrue PST at the commencement of their employment or after July 1, 2017, whichever is later. A.R.S. § 23-372(D)(1). Employees may use the PST as they accrue it. A.R.S. § 23-372(D)(2). However, an employer may require an employee hired after July 1, 2017 to wait until the 90th calendar day after commencing employment before using accrued PST. Id.
Are employers responsible to report Paid Sick Time?
Employers are responsible for keeping payroll records of employees’ used and accrued PST. A.R.S. §23-364(D). Failure to keep such records creates a rebuttable presumption that the employer did not pay earned PST. Id. Moreover, the employer also must record on the employee’s paycheck, or in an attachment thereto, the amount of earned paid sick time available, the amount already used, and the corresponding dollar value of the amount used. A.R.S. §23-375(C).
Are Employers required to notify their employees of these changes?
Employers must also post notices, in English and Spanish, informing employees of their rights under this new law. The Industrial Commission will create posters containing this information for use by employers. A.R.S. §23-375(D).
How will temporary or seasonal employees accrue sick time?
In this regard, the law provides as follows:
When there is a separation from employment and the employee is rehired within nine months of separation by the same employer, previously accrued earned sick time that had not been used shall be reinstated. Further, the employee shall be entitled to use accrued earned paid sick time and accrue additional earned paid sick time at the re-commencement of employment.
A.R.S. § 23-372(D)(5). Thus, an employer who employs someone who completely separates from the firm and then returns less than nine months later must reinstate his/her previously accrued sick time, permit its immediate use, and begin accruing PST anew for the employee.
For example, if a temporary or seasonal employee works for some period and then maintains his/her employment but does not work again for some time, the employer would simply accrue PST as the employee earns it. If the employee works 40 hours and three weeks later works another 20 hours, the employee would be entitled to two hours of PST. In the case that the employee wants to use it as it is accrued, he/she could only use one hour after he/she worked the 40 hours. However, the law does permit an employer to loan PST to an employee before accrual. A.R.S. § 23-372(D)(7).
The employer may decide how to measure the year in which PST is accrued. The statute defines a year as “a regular and consecutive 12-month period as determined by the employer.” A.R.S. § 23-371(L). Thus, if an employee worked 250 hours in one year, he/she would have accrued eight PST hours. The remaining 10 hours would not count towards accrual during the next year. However, the employee’s unused PST does roll over to the next year. A.R.S. § 23-372(D)(4).