New Earned Paid Sick Time Law in Arizona

If you operate a business in Arizona, then you already know about Proposition 206, which increased the state minimum wage to $10 an hour beginning January 1, 2017. However, many employers are not aware of another important provision of this new law which requires employers to provide all employees earned paid sick time. Beginning July 1, 2017, employers will be subject to the following requirements under A.R.S. § 23-372:

  • For every 30 hours worked, an employee will accrue 1 hour of earned paid sick time
  • For employers with 15 employees or more, the sick time is capped at 40 hours per year
  • For employers with fewer than 15 employees, the sick time is capped at 24 hours per year

This requirement applies even if you already have an established sick time policy. Employers are required to notify their employees of the new requirements in writing at the time of hiring, or by July 1, 2017—whichever is later. Employers must also maintain payroll records for each employee showing the hours worked each day, the wages earned, and accrued sick time for all employees for a period of four years. If an employer fails to comply with the new law or provide the required sick time, the employer may be subject to civil penalties and other sanctions.

Although employers are required to provide earned paid sick time, they are not required to reimburse an employee for unused sick time upon termination, retirement, or other separation from employment. The sick time may only be used during employment for the purposes listed in the statute—to care for an illness, injury or health condition of the employee or employee’s family member; absence due to a public health emergency; or an absence due to domestic violence or other abuse. An employer may not penalize an employee for using earned paid sick time for any of these purposes. There are also strict penalties for retaliating against an employee for using earned paid sick time.

As an Arizona employer, it is important to familiarize yourself with these new requirements and properly notify your employees before the law takes effect on July 1. The legal requirements are complex and violations can be costly for a small-business owner. It may be necessary to consult with your payroll servicer to ensure compliance. Taking these steps now will avoid potentially serious consequences as a result of this significant change in Arizona law.

Taylor House, Esq., is an associate attorney with Kuzmich & Associates located in Tempe, Arizona. Kuzmich & Associates assists many veterinarians and practice managers through the state with a variety of legal issues, including employment contracts, leases, contract review and practice transitions. Taylor can be reached at taylor@kuzmich-legal.com.