Prop 206: Paid sick leave takes effect

In November 2016, Arizona voters passed Proposition 206, which increases Arizona’s minimum wage to $10 per hour and requires Arizona employers to provide paid sick time to all employees.

The new $10 hourly minimum wage went into effect Jan. 1, 2017 with the hourly minimum wage set to increase incrementally to $10.50 on January 1, 2018, to $11.00 on January 1, 2019, and to $12.00 on January 1, 2020.

On July 1, the paid sick leave requirement went into effect. The employee’s paid sick leave begins to accrue on July 1 or on the employee’s first day of employment, whichever is later.

Employees of employers with 15 or more employees accrue a minimum of one hour of earned paid sick leave for every 30 hours worked. The employee shall not, however, be entitled to accrue or to use more than 40 hours of paid sick leave in a given year, unless the employer sets a higher limit.

Employees of employers with fewer than 15 employees also accrue a minimum of one hour of earned paid sick leave for every 30 hours worked, however the employee will not be entitled to accrue or to use more than 24 hours of paid sick leave in a given year, unless the employer sets a higher limit.

Employees exempt from overtime are assumed to work 40 hours each workweek, unless their normal workweek is less than 40 hours. In that case, the employee accrues paid sick leave based on her or his normal workweek.

Employers may provide all earned paid sick leave that an employee is expected to accrue within the year at the beginning of that year.

The employee may use the accrued sick time as she or he earns it. The law permits employers to require those employees hired after July 1, 2017 to wait a 90-day probationary period before using their accrued paid sick leave.

Arizona’s new paid sick leave law likely overlaps with the unpaid leave requirements of the Family and Medical Leave Act (“FMLA”). The Arizona law does not limit or otherwise affect the applicability of an employee’s rights under FMLA, and those rights may run concurrently with FMLA leave subject to the limitations set forth under FMLA and its regulations.

The earned paid sick time shall carry over to the following year subject to the 40-hour or 24-hour limitations. Alternatively, the employer may payout accrued unused sick leave at the end of the year.

Employers are required to notify employees of their right to earn paid sick leave.

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