Minimum Wage and Paid Sick Leave: New Arizona Statutes

Arizona’s latest minimum wage increase, to $12.15 per hour, went into effect January 1, 2021.

In the November 2016 election, Arizona voters approved Proposition 206 (the Fair Wages and Healthy Families Initiative), which gradually raised the minimum wage in Arizona to $12.15 (as of January 1, 2021) and requires virtually all employers to provide paid sick leave.

The paid sick leave portion of the law took effect July 1, 2017.

Paid Sick Leave

Passage of Prop. 206 made Arizona one of only seven states to require employers to provide paid sick leave.

Employees of small employers (under 15 employees) are eligible for up to 24 hours of sick leave annually. Employees of larger companies are eligible for up to 40 hours of leave. Other important provisions include the following:

• All employees, including part-time and temporary employees, must be provided with paid sick leave. The law provides for a minimum “accrual” of leave (1 hour of leave for every 30 hours worked) but allows employers to grant employees a specific amount of leave at the start of the year.
• Employees must be given written notice of their rights under the law (see English and the Spanish language notices downloadable from the Industrial Commission of Arizona website).
• The permitted uses of the leave are broad, and include not just the employee’s own illness but also illnesses of the employee’s family members and leave relating to domestic violence.
• Paid sick leave must carry over from year to year, unless the employer pays its employees for unused sick leave at the end of the year and provides a single grant of leave at the start of the year.
• Employers who wish to require employees to provide notice prior to taking foreseeable leave must have a written policy.
• Leave must accrue beginning with the first day of employment, but employers may have a policy restricting employees from using leave within the first 90 days of employment.
• Employers must provide employees with a record of the leave they have been provided and used, and employers must retain those records for four years.
• Unused leave does not need to be paid out at the end of employment.
• Employers may not retaliate against employees for using or requesting paid sick leave.

The 2016 law allows employers to provide the paid sick leave in the form of “paid time off” that can be used for a variety of purposes, as many employers do under existing policies. However, these policies must provide employees with at least the benefits specified under the new statutes. Many employers may need to review existing policies or adopt new policies in order to fully comply with the new law.