Proposition 206, the Fair Wages and Healthy Families Act (the “Act”), was a ballot initiative approved by Arizona voters on November 8, 2016. The Act established a new Arizona state minimum wage effective January 1, 2017, and entitles employees to accrue earned paid sick time.  Effective July 1, 2017, employers of Arizona employees must accrue and provide paid sick leave for all employees except exempt employees.  Earned paid sick time is sick time accrued by an employee that is compensated at the same hourly rate and with the same benefits, including health care benefits, as the employee normally earns during hours worked.

Employees can begin accruing earned paid sick time at the commencement of employment or July 1, 2017, whichever is later. Employees may use earned paid sick time for themselves or for family members (see Arizona Revised Statutes § 23-373 to see who qualifies as a family member) in the following circumstances:

  • Medical care or mental or physical illness, injury, or health condition;
  • A public health emergency; (see Arizona Revised Statutes § 23-373 for more information about what qualifies as a public health emergency) ; and
  • Absence due to domestic violence, sexual violence, abuse, or stalking.

For employers with 15 or more employees: Employees must accrue a minimum of one hour of earned paid sick time for every 30 hours worked, but employees are not entitled to accrue or use more than 40 hours of earned paid sick time per year, unless the employer selects a higher limit.

For employers with fewer than 15 employees: Employees must accrue a minimum of one hour of earned paid sick time for every 30 hours worked, but they are not entitled to accrue or use more than 24 hours of earned paid sick time per year, unless the employer sets a higher limit.

An employee who earns sick time is every person who performs work for compensation, whether full-time, part-time, or on a temporary basis, as an employee. For purposes of determining the number of employees, an employer has 15 or more employees if it maintained 15 or more employees on the payroll for some portion of a day in each of 20 different calendar weeks (the weeks do not have to be consecutive) in the current or preceding year.

Earned paid sick time shall be carried over to the following year, subject to usage limitations based on employer size. Alternatively, in lieu of carry over, an employer may pay an employee for unused earned paid sick time pursuant to Arizona Revised Statutes Section § 23-372(D)(4).  An employee of an employer with 15 or more employees may carry over to the following year a maximum of 40 hours of unused earned paid sick time. An employee of an employer with fewer than 15 employees may carry over to the following year a maximum of 24 hours of unused earned paid sick time.

Employers Must Give Employees Notices of Accrued Sick Time

Employers must give employees written notice of the following at the commencement of employment or by July 1, 2017, whichever is later:

  • Employees are entitled to earned paid sick time;
  • The amount of earned paid sick time that employees are entitled to accrue;
  • The terms of use guaranteed by Arizona’s earned paid sick time laws;
  • That retaliation against employees who request or use earned paid sick time is prohibited;
  • That each employee has the right to file a complaint if earned paid sick time is denied by the employer or the employee is subjected to retaliation for requesting or taking earned paid sick time; and
  • Contact information for the Industrial Commission.

See the Industrial Commission’s 2017 model earned paid sick time employee notice.

Employer’s Record-keeping Requirements

Unless otherwise exempted from the record-keeping requirements, employers subject to Arizona’s earned paid sick time laws are required to comply with notice, posting, and record-keeping requirements pertaining to earned paid sick time. The requirements include:

(1) posting earned paid sick time notices in the workplace;

(2) providing employees with the employer’s business name, address, and telephone number in writing upon hire;

(3) providing employees with a notice that informs them of their rights and responsibilities under the Fair Wages and Healthy Families Act; and

(4) maintaining payroll records in accordance with Arizona’s statutes and rules.

For more information about which employers are subject to Arizona’s earned paid sick leave laws, see Which employers are subject to earned paid sick time laws?

Download and print the Industrial Commission’s 2017 model earned paid sick time notice.

Note:  The Industrial Commission is currently proposing rules that would exempt small employers (defined as a corporation, proprietorship, partnership, joint venture, limited liability company, trust, or association that has less than $500,000 in gross annual revenue) from the Act’s posting requirements.

Paycheck Notice Requirement

An employer must also provide employees either in or on an attachment to the employee’s paycheck:

  • The amount of earned paid sick time available to the employee;
  • The amount of earned paid sick time taken by the employee to date in the year; and
  • The amount of pay time the employee has received as earned paid sick time.

An employee may use earned paid sick time as soon as it is accrued. However, an employer may require an employee hired after July 1, 2017, to wait 90 calendar days after the start of employment before using accrued earned paid sick time.

Employers’ Recommended Reading Assignment

If you or your company is an employer that employees people who are covered by the Act then the employer must comply with the Act.  All employers should read one of the following:

Posters Employers Must Post for Employees

Arizona law requires employers to post SIX notices, or “posters,” and each notice must be posted in a conspicuous place where employees will see it.  Go to the Industrial Commission’s required notices page to see the list of required notices and download each notice.