The Paid Sick Time portion of the Fair Wages and Healthy Families Act (the “Act”) goes into effect July 1.
You must accrue 1 hour of PST for every 30 hours worked.
If you have more than 15 employees, each accrual is capped at 40 hours per year.
If you have less than 15 employees, each accrual is capped at 24 hours per year.
Accrual for exempt employees is a presumption of working 40 hours OR if they work less, then calculated by actual time.
The mode of compensating employees for PST is:
Actual wages the employee would have been paid, if known, for the period in which PST is used; or
the average hourly rate of all wages paid during the previous 90 days, including shift differentials, commissions and hazard pay.
Overtime, holiday pay, bonuses, other types of incentive pay, tips, and gifts do not need to be included in an hourly wage rate determination.
In no case may an employer pay less than minimum wage per hour of earned paid sick time. For tipped employees, you need to pay minimum wage or their hourly rate if it’s higher.
TIP: The Act says employer can define the 12-month period. Think about the year in which your policy will run. Are you busy in December? Then don’t have it end then. Have the policy run July 1 to June 30.
PAID SICK TIME CAN BE USED FOR:
An employee’s own mental or physical illness, injury or health condition, or the employee’s need to seek medical diagnosis, treatment, or preventative care;
A family member’s mental or physical illness, injury or health condition, or the family member’s need to seek medical diagnosis, treatment, or preventative care;
Closure of the employee’s workplace due to a public health emergency, or an employee’s need to care for a child whose school or place of care has been closed due to a public health emergency;
When an employee or employee’s family member’s “presence in the community may jeopardize the health of others” due to exposure or suspected exposure to a communicable disease; and
Absences due to domestic violence, sexual violence, abuse, or stalking of an employee or employee’s family member, as these terms are defined in the statute, if the leave is to address the psychological, physical, or legal effects on the employee or the employee’s family member.
The Act defines “family member” broadly to include: spouse or legally registered domestic partner, grandparents, grandchildren, siblings, or person who stood in loco parentis of an employee or his/her spouse or domestic partner, children (biological, adopted, foster, stepchild, loco parentis), regardless of age, and any other individual related by blood or affinity whose close relationship is the equivalent of a family relationship.
WHEN CAN YOU REQUEST PAPERWORK?
Under the new law, you cannot request paperwork until 3 days of consecutive absences occur.
Employers who currently follow a policy of requesting a doctor’s note for any single-day absences should pay close attention to this change and modify its practices accordingly.
Managers CANNOT inquire about why an employee is absent. Watch out for this trap and train your staff.
WHAT TYPE OF PAPERWORK CAN YOU REQUEST?
A police report;
A protective order, injunction against harassment, general court order, or other evidence from a court or prosecuting attorney;
A signed statement from a domestic violence or sexual violence program, or victim services organization affirming that the employee or employee’s family member is receiving services related to domestic violence, sexual abuse, or stalking;
A signed statement from a witness advocate concerning services from a victim services organization affirming that the employee or employee’s family member is receiving services related to domestic violence, sexual abuse, or stalking;
A signed statement from an attorney, member of the clergy, or a medical or other professional affirming that the employee or employee’s family member is receiving services related to domestic violence, sexual abuse, or stalking; or
An employee’s legible, written statement concerning status of the employee or the employee’s family member as a victim of domestic violence, sexual violence, abuse, or stalking that signals the employee’s identity and (if applicable) relationship to the family member.
CAN YOU REQUIRE THEM TO GIVE NOTICE?
Employers can require prior notice for PST so long as a written policy that includes procedures for providing notice exists.
Employers must give employees a copy of that policy and it CANNOT require employees to find replacements. If this is a current practice, you should look for alternatives now.
Post earned paid sick time notices in the workplace;
Provide employees with the employer’s business name, address, and telephone number in writing upon hire;
Provide employees with a notice that informs them of their rights and responsibilities under the Fair Wages and Healthy Families Act; and
Maintain payroll records in accordance with Arizona’s statutes and rules. You must keep associated paperwork for 4 Years.
PENALTIES FOR NONCOMPLIANCE
An employer who violates The Fair Wages and Healthy Families Act’s recordkeeping, posting, or other requirements is subject to a civil penalty of at least $250 for the first violation and at least $1000 for each subsequent or willful violation.
Two-year statute of limitations. This is longer than for other claims.
Failure to pay: An employer who fails to pay earned paid sick time will be required to pay the employee the wages owed with interest and an additional amount equal to twice the underpaid wages.
Retaliation: An employer who retaliates against an employee is required to pay penalties sufficient to compensate the employee and deter future violations, but not less than $150 for each day that the violation continued or until legal judgment is final.
The Commission and courts have the authority to order other appropriate legal or equitable relief for violations of The Fair Wages and Healthy Families Act.
Additionally, if an employer fails to maintain required records, it will be presumed that the employer did not pay the required minimum wage or earned paid sick time. An employer has the right to rebut this presumption with evidence that the employer paid the employee the required minimum wage.
The law allows employers to keep existing PTO IF the paid leave exceeds AZ PST requirements AND can be used for the same purposes and under the same conditions as PST.
Why not to combine them? You can end up with more time in the PTO bucket than anticipated and all of that time could be subject to the Act!
DOCUMENTS TO EXAMINE
PTO Policy (recommend reducing PTO by 40 hours)
Call out policy
Executive Contracts (is there PTO included?)
Perfect attendance award
Look at attendance policies and consequences for missing work. You CANNOT count absences for PST as a reason to terminate an employee.
Arizona Industrial Commission FAQ
Employee Notice (English)
Employee Notice (Spanish)