Introduction
Over 58% of Arizona voters cast a vote in favor of Proposition 206 (AZ Prop 206) in November 2016. Though heavily contested, the Fair Wages and Healthy Families Act was ultimately affirmed by the Arizona Supreme Court. As a result, the state adopted an aggressive schedule to raise the minimum wage, and instituted a new program to require paid sick leave for Arizona workers.
What Qualifies For Paid Sick leave?
Earned paid sick leave is defined as “leave time 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” (ARS 23-371). Under the Fair Wages and Healthy Families Act, there are seven qualifying circumstances where an employee may use earned paid sick leave:
- Seeking preventative medical care for yourself or a family member
- Accompanying a family member to a preventative medical care appointment
- Personal physical illness, mental illness, injury, or health conditions
- Caring for a family member with a physical illness, mental illness, injury, or health condition
- Seeking a medical diagnosis, care, or treatment for yourself or a family member
- A public health emergency
- Absences due to abuse, sexual violence, domestic violence, or stalking
For absences related to abuse, sexual violence, domestic violence, or stalking, the victim must be the employee or a family member. Furthermore, the absence must be for one of the following purposes:
- Seeking medical attention to recover from a physical injury, psychological injury, or disability caused by abuse, sexual violence, domestic violence, or stalking
- Attending a domestic violence program, sexual violence program, or victim services organization
- Seeking psychological or other counseling
- Relocating or taking steps to secure an existing home
- Attending to legal services related to the abuse, sexual violence, domestic violence, or stalking, especially preparing for or participating in civil or criminal proceedings
How Much Paid Sick Time Must an Employer Offer?
The amount of paid sick time an employer must provide depends on the number of workers the company employs in Arizona. The Fair Wages and Healthy Families Act establishes two size-based groups:
- 15 or more employees – employees must earn at least one hour of paid sick time for every 30 hours worked, up to a maximum of 40 hours of earned paid sick time per year.
- 14 or Fewer Employees – employees must earn at least one hour of paid sick time for every 30 hours worked, up to a maximum of 24 hours of earned paid sick time per year.
Of course, employers are welcome to implement benefit programs that offer more paid sick leave than the state-imposed minimums. They are bound by the minimum provisions of the law, but there are no caps on how much earned paid sick time an employer may provide.
Employee Eligibility
All full-time and part-time employees are eligible for paid sick leave in Arizona. This includes on-call employees, though employers are permitted to restrict the use of earned paid sick time to periods of time where the on-call employee is scheduled (or would normally be scheduled) to work.
Independent contractors are not eligible for paid sick leave under the Fair Wages and Healthy Families Act. Unfortunately, it’s not uncommon for employers to misclassify an employee as an independent contractor to avoid obligations such as paid sick leave, minimum wage, and healthcare benefits. If you believe you are improperly classified as an independent contractor, you should discuss your case with an Arizona employment attorney to determine if you can seek unpaid wages and/or benefits from the employer.
Employers Covered by the Law
While the Fair Wages and Healthy Families Act provides limited exceptions for small businesses when it comes to the minimum wage, all private employers in Arizona are subject to the paid sick leave provision. That includes associations, corporations, joint ventures, LLCs, partnerships, political subdivisions of the state, proprietorships, trusts, and any entity acting directly or indirectly in the interest of an employer in relation to an employee.
The law does provide an exception for public employers. Workers employed by the state or federal government are exempt because they fall under other government-related employment laws.
Front Loading Paid Sick Time
While most wage-based employees earn paid sick leave as they accumulate hours, many salaried employees receive their annual allotment of paid sick leave at the beginning of the year. This is referred to as front loading paid sick time, or front loading benefits. The practice of front loading paid sick time is perfectly acceptable under the Fair Wages and Healthy Families Act, provided the employer complies with the annual minimums imposed by the law.
When an employer who front loads paid sick time hires a new employee after the start of the year, the employer may wait up to 90 days before awarding the new employee their annual allotment of earned paid sick leave. Furthermore, the employer may prorate the new employee’s earned paid sick time based on the expected hours worked for the remainder of the year. For example, a new employee who is expected to work fifteen 40-hour weeks before the end of the year (600 hours) must receive a minimum of 20 hours of earned paid sick leave. If the employee ends up working more hours than estimated, the employer must provide the employee with additional paid sick time to comply with the law.
How Does an Employer Determine Hourly Rates for Paid Sick Time?
Determining an hourly rate for paid sick time is easy for employees with a single hourly rate, but it can be confusing for employees with variable pay. To address these contingencies, the Fair Wages and Healthy Families Act lumps employees into four groups when determining the hourly rate for paid sick time:
- Single Hourly Rate – the employer must pay the employee’s standard hourly rate
- Multiple Hourly Rates – ideally, the employer should pay the rate the employee would have earned for each hour of paid sick time (e.g. the employee earns $12 an hour for the first four hours, then $16 an hour for the second four hours). When the exact rate is unknown, the employer must use a weighted average of all hourly rates paid during the previous pay period.
- Salary – as long as the use of paid sick time doesn’t result in a reduction in the employee’s regular salary, no additional pay is due.
- Commission, Piece-Rate, and Fee-for-Service – the employer should determine the hourly rate for paid sick leave based on one of the following methods (listed in order of priority): 1) a predetermined minimum hourly rate for work performed or paid sick time; 2) the employees known wages for the period, divided by the number of hours of paid sick time used; 3) a reasonable estimate of the compensation the employee would have been paid for the period of time the sick time is used, divided by the hours used; 4) an hourly average of the employee’s compensation earned over the past 90 days.
When an employee would have earned a premium or shift differential to compensate them for work performed under special conditions (e.g. night shifts, hazard pay) when the paid sick was used, these wages must be included when calculating the employee’s hourly rate. However, the employer is not required to include bonuses, holiday pay, overtime, gifts, tips, or other types of incentive pay in the hourly rate determination. In all cases, the hourly rate for paid sick leave cannot be less than the state minimum wage.
Who Enforces the Fair Wages and Healthy Families Act?
The Industrial Commission of Arizona (ICA) is responsible for enforcing the minimum wage and earned paid sick leave provisions of the Fair Wages and Healthy Families Act. Employers who violate the law will be investigated, and the ICA has the authority to issue a Determination to pay employees unpaid wages up to $5,000.
Receive Help With a Wage or Sick Leave Dispute in Arizona
If you believe that your employer has withheld money from you, not given you the proper amount of sick leave, or you believe you are taken advantage of by your employer, contact an employment law attorney. Our employment law team at JacksonWhite has built a reputation as one of the best employment law teams in Arizona and has decades of experience to back it up. You have the right to sick leave time and Arizona employers cannot withhold that from you.
Call our Employment Law team at (480) 464-1111 to discuss your case today.