On November 8, 2016, voters in Arizona approved a ballot measure requiring Arizona businesses to provide employees with paid sick leave. In approving the new Minimum Wage and Paid Time Off Initiative, Arizona joins a handful of states (as well as some municipalities) that have enacted paid sick leave laws. Below are five things Arizona employers need to know prior to the law taking effect on July 1, 2017.

1. How much paid sick leave must be provided?

Most private sector employers in with operations in Arizona are subject to the new law. “Small businesses” are exempt from the new law. To qualify as a “small business,” an employer must have gross annual revenues of less than $500,000 and not be engaged in interstate commerce or in the production of goods for interstate commerce. For all other employers, the minimum paid sick leave requirements are as follows:

• Employees working for employers with 15 or more employees are entitled to accrue up to 40 hours of paid sick leave per year.

• Employees working for employers with fewer than 15 employees are entitled to accrue up to 24 hours of paid sick leave per year.

2. How does sick leave accrue?

Regardless of the size of the employer, employees must accrue paid sick leave at the rate of at least one hour for every 30 hours worked.  

3. How can employees use paid sick leave?

Employees can use their paid sick leave hours for a variety of reasons, including: 

• Their own mental or physical illness, injury, or health condition;

• The mental or physical illness, injury, or health condition of a family member; 

• Absences related to abuse, stalking, sexual violence, or domestic violence of either the employee or the employee’s family member; and/or

• When a public health emergency causes the employee’s workplace to close, or the employee’s child’s school or daycare to close.

4. Who is a “family member”?

The new law defines a “family member” broadly to include: 

• Children of any age (including biological, adopted, or foster children, as well as legal wards and children of a domestic partner); 

• Parents (including biological, foster, stepparents, adoptive parents, and legal guardians of the employee or the employee’s spouse or domestic partner); 

• Spouses and domestic partners; 

• Grandparents, grandchildren, or siblings of the employee or the employee’s spouse or domestic partner; or

• Other individuals related by either blood or affinity whose close association with the employee is the equivalent of a family relationship.

5. What happens when an employee leaves their job? 

Employers need not pay out unused and accrued paid sick leave time to employees whose employment ends for any reason. However, employees who are rehired by the same employer within nine months of termination are entitled to reinstatement of all accrued paid sick leave time. So for example, employers who conduct temporary layoffs and bring back employees within nine months must reinstate all of those employees’ accrued sick leave time.

Arizona employers take note: the new Minimum Wage and Paid Time Off Initiative also contains important notice and record keeping requirements. Please contact Polsinelli attorneys with any questions regarding compliance