Overview. On November 8, 2016, voters in Arizona and Washington were asked to consider Ballot Initiatives that would provide constituents in those states with paid sick leave, and both initiatives passed. Under Arizona’s Ballot Initiative Proposition 206, the minimum wage will increase to $12.00 per hour by 2020, and employees can earn paid sick leave beginning July 1, 2017, or at commencement of employment (whichever is later). Under Washington’s Ballot Initiative 1433, the minimum wage will increase to $13.50 per hour by 2020, and employees will be permitted to earn paid sick and safe leave beginning January 1, 2018.
The two states join Connecticut, California, Massachusetts, Oregon and Vermont in offering statewide paid-sick-leave programs.
Details. Below are the details of each sick leave law including entitlement, accrual rate, carryover, and permissible reasons for use.
Arizona. Beginning July 1, 2017, almost every employer shall provide each of its employees paid sick leave as follows:
Employer. All private employers, including municipalities and school districts are covered. Small businesses, state of Arizona employees and federal workers are exempt. A small business must have gross annual revenues of less than $400,000 and not be engaged in interstate commerce or in the production of goods for interstate commerce.
Accrual. Employees of an employer with 15 or more employees will accrued 1 hour of paid sick time for every 30 hours worked. Employees cannot accrue or use more than 40 hours of paid sick time in a year – unless the employer chooses to set a higher limit. Employers with fewer than 15 employees accrue at a rate of 1 hour of paid sick time per every 30 hours worked, but are entitled to accrue or use no more than 24 hours per year, unless the employer chooses to set a higher limit. Full time, part time, and temporary employees should be counted.
Frontloading. Employers may provide all earned paid sick time that an employee is expected to accrue in a year at the beginning of a year. For example, an employer with 15 or more employees may wish to frontload 40 hours to full time employees.
Use. Employees may use earned paid sick time as it accrues, but an employer may require an employee to wait until their 90th calendar day after commencing employment to use it.
Carryover. Accrued but unused paid sick time will carry over subject to usage. Alternatively, an employer may pay out the value of accrued but unused paid sick time at the end of each year and provide the employee with earned sick time that meets or exceeds what is required for immediate use.
Permissible Reasons for Use.
1. An employee’s own mental or physical illness, injury or health condition; need for medical diagnosis, care or treatment of a mental or physical illness, injury or health condition; and an employee’s need for preventive medical care.
2. Care of a family member with a mental or phisical illness; who needs medical diagnosis; or who needs preventive medical care.
3. Closure of the employee’s place of business due to a public health emergency, or an employe’s need to care for a child whose school or place of care has been closed by order of a public official due to a health emergency, or to care for one’s self or a family member when it has been determined that the employee or family member’s presence in the community may jeopardize the health of others.
4. Absence necessary due to domestic violence, sexual violence, abuse or stalking, for specified reasons, and notwithstanding Arizona’s existing Domestic Violence law (12-4439).
Existing PTO Policies. An employer with an existing PTO policy that provides the requisite amount of time, and can be used for the same purposes and under the same conditions as earned paid sick time, need not provide additional paid sick time.
Employer Notice Requirement. Employers must give employees notice of their entitlement to paid sick time at the commencement of their employment or by July 1, 2017, whichever is later. The notice shall be in English, Spanish, and any other language deemed appropriate by the Industrial Commission of Arizona (ICA). Employers must post notices in their workplace in the format specified by the ICA, notifying employees of their earned paid sick time rights
Wage Statement Notice. Employers must include the amount of earned paid sick time available to the employee; the amount taken to date; and the amount of pay received as earned paid sick time “in or on an attachment to” an employee’s regular paycheck.
Employee Notice Requirement. Employees should give as much notice as foreseeable of the need for leave. The notice need not be in writing.
Termination and Reinstatement. Employers are not required to pay out accrued but unused paid sick time at the time of termination of employment. However, if an employee is reinstated within nine months, the employee is entitled to have all accrued but unused paid sick time reinstated.
Record Retention. . Employers must maintain payroll records showing the accrued and used paid sick time for all employees for a period of four years.
Washington. Beginning January 1, 2018, every employer shall provide each of its employees paid sick leave as follows:
Accrual. An employee shall accrue at least one hour of paid sick leave for every forty hours worked. Accrual begins on the first day of employment. There is no limit on the number of hours an employee may accrue in one year.
Frontloading. Frontloading is permitted provided that such frontloading meets or exceeds the requirements pertaining to accrual, use, and carryover of paid sick leave.
Permissible Reasons for Use. Sick leave can be used for the following reasons:
1. An absence resulting from an employee’s own mental or physical illness, injury or health condition; to accommodate the employee’s need for medical diagnosis, care or treatment of a mental or physical illness, injury or health condition or an employee’s need for preventative medical care;
2. To allow the employee to provide for a family member with a mental or physical illness, injury or health condition;
3. When the employee’s place of business has been closed by order of a public official for any health related reason, or when an employee’s child’s school or place of care has been closed for such reason.
4. For absences that qualify for leave under Washington’s domestic violence leave act.
Entitlement to Use. Employees can use accrued paid sick leave beginning on the 90th calendar day after the commencement of his/her employment.
Existing PTO Policies. Employers are not prevented from providing more generous paid sick leave policies or permitting use of the leave for additional purposes.
Notice. Employers may require employees to give reasonable notice of an absence from work, so long as such notice does not interfere with an employee’s lawful use of paid sick leave. For absences exceeding three days, an employer may require verification that an employee’s use of paid sick leave is for an authorized purpose, which must be provided within a reasonable time during or after the leave.
Carryover. Unused paid sick leave carries over to the following year, except that an employer is not required to allow an employee to carry over paid sick leave in excess of 40 hours.
Termination and Reinstatement. Employers are not required to pay out the value of accrued but unused paid sick leave upon an employee’s termination, resignation, retirement, or other separation from employment. However, where there is separation, and the employee is rehired within twelve months, previously accrued unused paid sick time shall be reinstated and the previous period of employment shall be counted for purposes of determining the employee’s eligibility to use paid sick leave.
Municipal leave laws already exist in Seattle (effective September 1, 2012), Tacoma (effective January 1, 2017), and Spokane (effective January 1, 2017).
Call to Action. Prepare your workforce for the changes that paid sick leave will bring. Be sure to review and revise your policies appropriately. Will you amend your existing PTO policy or to create new, separate, Paid Sick Time policy? Will you pay out accrued but unused time at the end of each year? Will you frontload? In addition, Arizona employers should reach out to their payroll service representative to ensure proper set up of their employees’ wage statements to reflect accrued unused sick time, time used, and amounts paid.
As always, reach out to your Relationship Manager or Service Team with any questions.