10 Employer Considerations In Light of Arizona's New Paid Sick Time Law

On July 1, 2017, all Arizona employees became eligible to begin accruing "Paid Sick Time" benefits under the Fair Wages and Healthy Families Act ("the Act").1 For several months following the law's enactment on November 8, 2016, the Industrial Commission of Arizona ("ICA"), the agency charged with enforcing the Act, provided little guidance on how employers must comply with the new paid sick time ("PST") portions of the law.

However, over the past few months, the ICA has issued two sets of proposed regulations and created and regularly updated "Frequently Asked Questions" on its website designed to help employers understand their obligations under the new PST law. The proposed regulations will not be finalized until later this summer, and employers should continue to be watchful for additional guidance from the ICA. In the meantime, because the PST law and implementing guidance have many nuances, this article will highlight the aspects we most commonly have been addressing, and what companies should consider doing now.

Paid Sick Time - General Overview

Beginning on their first day of work, all employees (full-time, part-time, temporary, and on-call) are entitled to accrue PST at a rate of one hour for every 30 hours actually worked, up to an annual cap of 40 hours for "large employers" (15 or more employees) or 24 hours for "small employers" (fewer than 15 employees), unless an employer sets a higher annual limit.

Employees are entitled to use PST in the following general circumstances:

An employee's or family member's need for medical care or mental or physical illness, injury or health condition; A public health emergency; or Absence due to domestic violence, sexual assault, abuse, or stalking. The Act broadly defines "family member" to include the following relationships by blood, adoption, marriage, or otherwise: child, parent, spouse, domestic partner, grandparent, grandchild, sibling, or any other person whose close affinity is the equivalent of a family relationship.

  1. Counting Employees to Determine Employer Size. As noted above, the number of employees determines which annual accrual and use cap applies. A "large employer" has 15 or more employees working in Arizona on payroll for some portion of a day in each of 20 nonconsecutive weeks in the current or preceding year, and a "small employer" has fewer than 15 employees working in Arizona.

    Employers must count all full-time, part-time, on-call, and temporary workers performing work...

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