Arizona Prop 206 Upheld by Arizona Supreme Court
Paid Sick Time Off is Required by Arizona Employers
Some employers were taking the "wait and see" approach with Prop 206 due to the legal challenge filed by the Arizona Chamber of Commerce. The waiting is now over. On March 15, 2017, the Arizona Supreme Court voted unanimously to uphold Prop 206. In other words, Prop 206 is here to stay, and employers need to comply or face serious consequences.
Prop 206, in a nutshell, raises the Arizona minimum wage and requires employers to give employees a certain amount of Paid Sick Time Off ("PSTO") for a broad range of qualifying healthcare and legal reasons. Employers must have an appropriate PSTO policy that complies with the new law before it becomes effective on July 1, 2017. If they don't, they face serious consequences - including having to pay their employees two times the PSTO that should have been given to them, if the employee were to hire a lawyer and sue there is a mandatory award of attorney fees, as well as fines and penalties. Additionally, if the Department of Labor finds out that an employer doesn't have a policy in place on July 1, 2017 it may conduct an audit of all of the employer's records and practices.
PSTO Policy: Next Steps
Employers should engage legal counsel to prepare a PSTO policy. That policy needs to be implemented on or before July 1, 2017. They should also ensure that their payroll department understands its obligations. If an employer uses a payroll company, the employer will want to make arrangements with that company to ensure a smooth transition.
Jaburg Wilk has drafted PSTO policies for several different employers that comply with Prop 206 and have advised them on best practices for complying with the new law which is complicated and nuanced. To learn more about obligations of Arizona employers under the new law. We will continue to provide updates on PSTO compliance.