Arizona’s Prop 206: New HR Rules
REDW | January 5, 2017
If you are an employer, or have clients with Arizona-based employees, you will be affected by the newly passed Proposition 206. This proposition mandates that:
- A new minimum wage will be in effect beginning January 1, 2017: $10/hour (raised from $8.05/hour)
- Employers with 15 or more employees (including temps and part-time employees) must provide 40 hours of paid sick time per year to all employees
- Employers with fewer than 15 employees must provide 24 hours of paid sick time per year to all employees
- Date of compliance for sick leave is July 1, 2017
An employer can add this sick leave to their existing PTO plan, but if there is a payout on an employee’s accrued, unused PTO, it is recommended to not include the sick leave in the PTO bank. Adding the paid sick leave to the PTO bank can also impact the rollover hours that are allowed at the end of the year (if applicable). Under the guidelines, accrued, unused, paid sick leave does not have to be paid out when an employee leaves, but does roll forward from year-to-year.