Effective July 1st, 2017 Arizona Proposition 206, also known as The Fair Wages and Healthy Families Act, will require employers to provide paid sick leave to their employees. Below is some important information on the upcoming act and how to set up a compliant paid sick leave policy inside OnPay. If you would like additional information on Proposition 206 and how it may affect your company, please review Arizona's website by clicking here.
How much earned paid sick time must an employer offer an employee?
Fewer than 15 Employees: Employees must accrue a minimum of one hour of earned paid sick time for every 30 hours worked, but they are not entitled to accrue or use more than 24 hours of earned paid sick time per year unless the employer selects a higher limit.
15 or More Employees: Employees must accrue a minimum of one hour of earned paid sick time for every 30 hours worked, but employees are not entitled to accrue or use more than 40 hours of earned paid sick time per year unless the employer selects a higher limit.
Important Arizona Compliance Details
- All full-time, part-time, and temporary employees are covered under the law and are required to earn sick leave.
- Exempt employees are assumed to work at a rate of 40 hours a week and will earn sick leave at that rate. Non-exempt employees continue to earn sick leave during overtime hours worked.
- After July 1st, 2017, employees must accrue time from their date of hire. The employer can limit employees from using the earned time until they have been employed for 90 or more days.
- Arizona employers are required to allow employees to carry their unused time year over year or pay the time out to the employee at the end of the year. If the employee does carry unused time from year to year, the employer is allowed to cap the usage of the sick leave at 40 hours.
- Employers must allow sick leave to be used in a minimum of 1-hour increments.
How to set up the Policy in OnPay
Calculation Information: The three levels shown above are identical because the employee accrual does not increase based on their length of service. The per hour accrual rate of .0334 is determined by dividing 1 hour worked by 30 hours. The bottom number of tiers 1, 2, and 3 is the balance cap and it will keep the employee from having a balance higher than 40 hours at any given time. Please keep in mind the balance cap will not stop the employee from accruing or using more than 40 hours in a given year. The amount used and accrued by the employee should be monitored by the employer. If your company has less than 15 employees you can simply change the bottom number on each of the plan tiers to 24 hours.