HR's Guide to Employee Leave Laws in Arizona

Are you aware of Arizona's Earned Paid Sick Time laws? As an employer in Arizona, it's crucial to understand the state's regulations regarding employee leave to ensure compliance and maintain a positive work environment.

In November 2016, Arizona voters approved Proposition 206, also known as the Fair Wages and Healthy Families Act. This legislation mandates that employers provide their employees with earned paid sick time, among other provisions.

Under Proposition 206, employees in Arizona accrue a minimum of one hour of earned paid sick time for every 30 hours worked. However, the accrual rates and usage limits vary depending on the size of the employer.

Overview of Arizona's Earned Paid Sick Time Laws

• Accrual rates: For employers with 15 or more employees, the maximum accrual and usage limit is 40 hours of earned paid sick time per year. Employers with fewer than 15 employees have a maximum accrual and usage limit of 24 hours per year.

• Carryover: Unused earned paid sick time carries over to the following year, subject to the aforementioned usage limits. Alternatively, employers may choose to pay out unused earned paid sick time at the end of the year and provide the employee with an amount that meets or exceeds the requirements for the new year.

• Usage: Employees can use their accrued earned paid sick time for various reasons, including their own illness, caring for a family member, or addressing issues related to domestic violence, sexual violence, abuse, or stalking.

• Exemptions: Certain employers, such as those with a paid leave policy that meets or exceeds the requirements of Proposition 206, may be exempt from providing additional earned paid sick time.

Accrual of Earned Paid Sick Time in Arizona

Under Arizona's Earned Paid Sick Time laws, the accrual rates for paid sick time vary based on the size of the employer. For businesses with 15 or more employees, the maximum accrual and usage limit is 40 hours of earned paid sick time per year. On the other hand, employers with fewer than 15 employees have a maximum accrual and usage limit of 24 hours per year.

When determining employer size, it's essential to count all employees performing work for compensation during a given week. This includes full-time, part-time, and temporary employees. If the number of employees fluctuates above and below 15 throughout the year, an employer is required to provide earned paid sick time at the higher accrual rate if they maintained 15 or more employees for some portion of a day in each of 20 different calendar weeks, whether consecutive or not, in the current or preceding year.

Accrual of earned paid sick time begins at the commencement of employment or on July 1, 2017, whichever is later. However, employers may require new hires to wait until their 90th day of employment before using accrued earned paid sick time, unless otherwise permitted by the employer.

Unused earned paid sick time carries over to the following year, subject to the usage limits based on employer size. Alternatively, employers may choose to pay out unused earned paid sick time at the end of the year and provide the employee with an amount that meets or exceeds the requirements for the new year.

Usage of Earned Paid Sick Time in Arizona

Under Arizona's Earned Paid Sick Time laws, employees can use their accrued sick leave for a variety of reasons. These permitted uses include:

• The employee's own mental or physical illness, injury, or health condition, including preventive medical care.

• Caring for a family member with a mental or physical illness, injury, or health condition, or who needs preventive medical care.

• Closure of the employee's place of business or a child's school or care facility due to a public health emergency.

• Absence necessary due to domestic violence, sexual violence, abuse, or stalking, to allow the employee or their family member to obtain related services or treatment.

When requesting earned paid sick time, employees must make a good faith effort to provide notice to their employer in advance when the need for leave is foreseeable. Employers may require reasonable documentation for absences of three or more consecutive workdays, such as a signed statement from a healthcare professional indicating that the sick time is necessary.

Earned paid sick time in Arizona may be used in the smaller of hourly increments or the smallest increment the employer's payroll system uses to account for absences or other time off. Employers cannot require employees to search for or find a replacement worker to cover the hours during which they are using earned paid sick time.

Arizona's Paid Parental Leave Pilot Program

In a significant development for employee leave laws in Arizona, Governor Katie Hobbs announced the establishment of a new Paid Parental Leave (PPL) pilot program for eligible State Personnel System (SPS) employees, effective September 2, 2023. This program provides up to 12 weeks of paid leave to employees following the birth, adoption, or foster placement of a child occurring on or after January 1, 2023.

Under the PPL pilot, eligible employees no longer need to use their own leave balances or take unpaid leave when welcoming a new child into their family. The leave may be taken within 12 months following the qualifying event. To be eligible, employees must have been continuously employed by the state for 12 months and have worked at least 1,250 hours in the 12-month period preceding the leave.

It's important to note that the PPL pilot runs concurrently with FMLA leave, which provides up to 12 weeks of unpaid, job-protected leave for qualifying reasons, including the birth or placement of a child. This means that the total combined leave under both programs cannot exceed 12 weeks in a 12-month period.

Family and Medical Leave Act (FMLA) Considerations in Arizona

Arizona employers must also comply with the federal FMLA, which entitles eligible employees to take up to 12 weeks of unpaid, job-protected leave per year for specified family and medical reasons. These reasons include the birth or placement of a child, the employee's own serious health condition, or caring for a family member with a serious health condition.

Under the FMLA, Arizona employers with 50 or more employees within a 75-mile radius are required to provide this leave to eligible employees who have worked for the company for at least 12 months and have completed at least 1,250 hours of service during the 12 months prior to the start of the leave.

Arizona has unique rules for married couples working for the same employer. In cases where both spouses are employed by the same company, they may be limited to a combined total of 12 weeks of FMLA leave for the birth or placement of a child or to care for a parent with a serious health condition. However, each spouse remains entitled to the full 12 weeks of leave for other FMLA-qualifying reasons, such as their own serious health condition or caring for a child or spouse with a serious health condition.

It's important to note that employees in Arizona may use their accrued paid sick leave for FMLA-qualifying reasons, such as their own serious health condition or caring for a family member with a serious health condition. Employers should be aware that the use of paid sick leave runs concurrently with FMLA leave and should be properly designated and tracked to ensure compliance with both state and federal laws.

Separating Employment and Leave Balances in Arizona

When an employee separates from their employer in Arizona, it's crucial to understand the state's requirements regarding the payout of accrued leave balances. Arizona's earned paid sick time laws do not require employers to provide financial or other reimbursement for unused sick leave upon an employee's termination, resignation, retirement, or other separation from employment.

However, if an employee is rehired by the same employer within nine months of separation, any previously accrued earned paid sick time that had not been used must be reinstated. The reinstated employee is entitled to use the accrued earned paid sick time and accrue additional earned paid sick time upon recommencement of employment.

In the event of retirement, employees participating in one of Arizona's authorized state retirement systems may be eligible for the Retiree Accumulated Sick Leave (RASL) program if they have more than 500 hours of accumulated sick leave. Under RASL, eligible retirees receive a percentage of their accrued sick leave hours as a payout.

It's essential for Arizona employers to maintain accurate records of employee leave balances and to communicate their policies regarding the treatment of accrued leave upon separation. By staying informed about Arizona's employee leave laws and consistently applying company policies, employers can ensure a smooth transition for departing employees while remaining compliant with state regulations.

Ensuring Compliance with Arizona's Employee Leave Laws

As an employer in Arizona, it's essential to stay compliant with the state's employee leave laws, including the Fair Wages and Healthy Families Act and the FMLA. To ensure compliance, consider the following best practices:

• Drafting compliant leave policies: Develop clear, comprehensive leave policies that align with Arizona's requirements, including accrual rates, usage limits, and permitted reasons for taking leave. Regularly review and update these policies to reflect any changes in state or federal regulations.

• Recordkeeping: Maintain accurate records of employee leave balances, accruals, and usage. Keep track of FMLA leave and ensure that employees provide appropriate documentation for extended absences. Retain these records for at least four years to demonstrate compliance with Arizona's laws.

• Employee notices: Provide employees with written notices about their rights under Arizona's earned paid sick time laws and the FMLA. Display posters in a conspicuous location and include information in employee handbooks or onboarding materials.

• Training: Educate managers and supervisors on Arizona's leave laws to ensure consistent application of policies and prevent potential violations. Provide training on how to handle leave requests, maintain confidentiality, and avoid retaliation against employees who exercise their rights.

• Monitoring legal updates: Stay informed about changes to Arizona's leave laws and regulations by subscribing to updates from the Industrial Commission of Arizona and other reliable sources. Consult with legal counsel or HR professionals to ensure ongoing compliance and address any complex situations that may arise.

By prioritizing compliance with Arizona's employee leave laws, employers can foster a positive work environment, minimize legal risks, and demonstrate their commitment to supporting their employees' well-being.

Navigating the complexities of Arizona's employee leave laws can be challenging, but understanding your obligations as an employer is crucial for maintaining compliance and fostering a supportive work environment. As you strive to create a fair and legally sound leave policy, remember that expert guidance can make all the difference. Book a demo with us today, and let our team help you simplify the process of managing employee leave in Arizona.