In keeping with what has become a nationwide trend, Arizona voters approved the Fair Wages and Healthy Families Initiative (“Proposition 206”), a ballot measure that incrementally increases the minimum wage, and requires employers to provide paid sick leave. The measure passed by a margin of 59% to 41%.
Minimum Wage Rates Hiked
Beginning January 1, 2017, the statewide minimum wage will increase to $10.00 per hour. The minimum wage will be raised to $10.50 in 2018, $11.00 in 2019, and $12.00 in 2020. Starting in 2021, the minimum wage is subject to annual adjustment based on the cost of living. (Employees who receive tips can continue to earn up to $3 per hour less than the current minimum wage—assuming the employer can establish that the employee’s total income equals at least the minimum wage when tips are included.)
All Employers Must Provide Paid Sick Leave
Beginning July 1, 2017, the new law also requires all employers to offer paid sick leave for their employees to use for their medical or mental health care, their need to care for a family member, a public health emergency, or for addressing domestic violence or abuse. Employers with 15 or more employees must permit employees to accrue and use up to 40 hours of paid leave per year. Employers with fewer than 15 employees must permit employees to accrue and use up to 24 hours of leave per year.
Employers will need to modify their leave policies to comply with the rather complicated and detailed paid leave requirements. For example, the law requires that employees be permitted to carry forward any accrued but unused sick leave into the following year unless the employer pays out the unused leave amounts. But the employer may pay out the accrued leave in lieu of carryover only if it frontloads the following year’s entire leave allotment to the employee for immediate use.
Notice of this new benefit, along with the new minimum wage, must be posted at the workplace.
We understand that many businesses—especially small businesses—may need to make some tough decisions to comply with these new requirements. If you would like assistance in planning for the implementation of Proposition 206, please contact BurnsBarton attorneys David Barton at 602.753.4504 (or david@burnsbarton.com) or Christie Hammerle at 602.753.4510 (or hammerle@burnsbarton.com).
This post was co-authored by Christie Hammerle.
