On November 8, 2016, voters in Arizona and Washington approved ballot initiatives that require employers to provide paid sick leave to their employees.  The Arizona law takes effect on July 1, 2017; the Washington law becomes effective January 1, 2018.  Following is a short summary of these laws.

Arizona

The Fair Wages and Healthy Families Act (Proposition 206) requires employers to provide paid sick leave to their employees, subject to the following caps:

• Employers with 15 or more employees must provide up to 40 hours of paid sick leave per year;
• Employers employing 14 or fewer employees must provide up to 24 hours of paid sick leave per year. 

For this purpose, affected employers are those subject to the Arizona wage and hour law and includes a corporation, partnership, association, political subdivision of the state or individual, or other entity acting directly or indirectly in an employer/employee relationship. Employer does not include the State of Arizona or the United States.  In determining the number of employees performing work for an employer during a given week, all full-time, part-time, and temporary employees are counted.

Amount of leave, accrual and carryover.  Any individual employed by the employer, including recipients of public benefits engaged in work activity as a condition of receiving public assistance, are entitled to earn and accrue one hour of sick leave for every 30 hours worked.  Unless the employer agrees to a higher amount, those employing 15 or more employees may cap an employee’s accrual and use of sick leave to 40 hours per year; or, 24 hours per year for employers with 14 or fewer employees.  Employees begin to accrue sick leave beginning the commencement of employment, or July 1, 2017, whichever is later.

Employees may use sick leave as it is accrued, however, an employer may require employees hired after July 1, 2017 to wait until the 90^th calendar day following the date of hire to begin using sick leave.

Employees generally must be permitted to carryover unused sick leave from one year to the next year, subject to the above-mentioned 40-hour/24-hour per year cap. Alternatively, in lieu of carryover, an employer may pay out the unused sick leave at the end of the year and then provide the employee with the full amount of sick leave at the beginning of the subsequent year.

Generally, an employer’s existing leave plan need not be changed as long as it meets the minimum requirements of the law.

Use of leave.  Leave can be taken to attend to the employee’s physical or mental illness, injury, medical diagnosis or treatment, including preventative medical care, or to attend to a family member’s illness, injury or medical treatment. In addition, leave may be taken to obtain services or care as a result of domestic violence, sexual assault, or stalking; or, to care for a family member due to the closure of a school or business for public health or safety reasons.

For this purpose, family member includes:

• Regardless of age, a biological, adopted, or foster child; a stepchild or legal ward; a child of a domestic partner; or a child of an employee standing in loco parentis;
• A parent (whether biological, adoptive, step or foster) of the employee or his/her domestic partner or spouse, or a person who stood in loco parentis when employee was a minor child;
• A legally married spouse or registered domestic partner;
• A grandparent, grandchild or sibling (whether biological, adoptive, step or foster) of the employee or his/her domestic partner or spouse; or
• Any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.

Notice obligations

An employee is obligated to provide an advanced request for leave together with the expected duration of the absence.  Employees are also expected to make a reasonable effort to schedule the leave in a manner that does not unduly disrupt the operations of the employer. If the need for leave is unforeseeable, the employee must notify the employer in accordance with the employer’s written policy.

Employers are required to provide written sick leave information to their employees upon commencement of employment, or by July 1, 2017, whichever is later. The Industrial Commission of Arizona is charged with creating and making available a model notice that can be used for notification purposes.  In addition, an employer must provide, with the employee’s regular paycheck, the amount of sick leave available, the amount used, and the amount of sick leave the employee has received.

Washington

The Washington Minimum Wage Increase (Initiative 1433) requires employers to provide one hour of paid sick leave for every 40 hours worked by their employees.  For this purpose:

• An employer is defined as any individual, partnership, association, corporation, business trust, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee. 
• Generally, an employee is any individual employed by an employer; however, there are many exceptions contained in the law as to the types of employees who are not entitled to the paid sick leave benefit.

Amount of leave, accrual and carryover

Eligible employees are entitled to accrue one hour of paid sick leave for every 40 hours worked.  Alternatively, an employer may front-load the sick leave amount as long as such amount meets or exceeds the amounts applicable for accrual, use and carryover.  The law at this point is not clear on how much sick leave must be front-loaded; hopefully, this will be clarified in regulations.

An employee can begin to use accrued sick leave beginning on the 90^th calendar day following the date of hire.  An employee may carryover unused paid sick leave from one year to the next, subject to the 40-hour annual cap.

Use of leave.  Leave can be taken to attend to the employee’s physical or mental illness, injury, medical diagnosis or treatment, including preventative medical care, or to attend to a family member’s illness, injury or medical treatment. In addition, leave may be taken to obtain services or care as a result of domestic violence, sexual assault, or stalking; or, to care for a family member due to the closure of a school or business for public health or safety reasons.

For this purpose, a family member includes:

• A child, whether biological, adopted, foster, or step, or a child to whom the employee stands in loco parentis, is a legal guardian, or is a de facto parent, regardless of age or dependency status;
• a biological, adoptive, de facto, foster, or step-parent, a legal guardian of the employee or the employee's spouse or registered domestic partner, or a person who stood in loco parentis when the employee was a minor child;
• a spouse or registered domestic partner;
• A grandparent, grandchild or sibling.

An employer’s existing leave plan need not be changed as long as it meets the minimum requirements of the law.  This state-wide law will have to be coordinated with current Washington leave laws such as the Family Care Act and the Family Leave Act, as well as any applicable local jurisdiction with a paid sick leave law in place such as Seattle, Spokane, and Tacoma.

Notice obligations by employees.  An employer 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. 

The Washington Department of Labor and Industries is directed to implement rules and procedures to carry out and enforce this law, which takes effect on January 1, 2018.  

The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.