Here’s What Arizona Small Businesses Should Know About Proposition 206

If you’re a small business owner in Arizona, this Saturday marks a big change in the laws regarding paid sick leave.

Passed in November of 2016, Proposition 206 kicks into gear on July 1st, and many small businesses could be caught unaware. Here are some of the important details you need to know.

employees working at small business

Which Businesses are Affected by Proposition 206?

All companies and non-profits with more than one employee must offer all employees paid sick time. That includes full time, part time, seasonal, and temporary employees.

What Must be Offered?

Paid sick time or paid time off (PTO) must be offered to all employees. This is not vacation time, however, which is separate. PTO can, however, be used for either purpose as long as the minimum requirement is met.

How Much Paid Sick Time is Required?

For every 30 hours worked, an employee must accrue one hour of paid sick time/PTO until the minimum requirement is reached.

About the minimum requirement: Companies or non-profits under 15 employees require 24 hours of paid time off (PTO) per year. Companies or non-profits with 15 or more employees require a minimum of 40 hours of paid time off (PTO) per year. Unused time can either be cashed out or rolled over to the next year.

What Proof is Needed to take Paid Sick Time or PTO?

Documentation cannot be required until the employee has been out three consecutive days. This time may also be used for care to be given to a sick child or spouse. Proposition 206 also allows this time to cover domestic violence situations.

What is the accrual requirement?

Employees must start accruing paid sick time or PTO on the first day of employment (or the first day they are clocked in and being paid for their time). There is an allowed probationary time that employers can require up to 90 days, however, before the time is available to be used.

Is Written Notice Required?

Yes. The Industrial Commission of Arizona says that employers are required to give employees written notice of the amount of sick time or PTO on their pay check or check stub (or via an attachment) with the Year to Date (YTD) amount of time earned or accrued, time taken and total amount paid to the employee.

Is a Poster Notice Required?

Yes. A written notice of the new sick time/PTO law must be displayed in a conspicuous place.
In addition, employers must provide employees with written notice by July 1st regarding their rights under the new policy.

What Happens if a Company Does Not Comply?

If a company or non-profit willfully ignores the law, they will be in violation and could face stiff fines or penalties as well as possible damages.

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