Fair Wages Act affects more than minimum wage for business owners
The Fair Wages and Healthy Families Act became effective July 1, 2017 and raised the minimum wage to $10 on January 1, 2017, and then incrementally, to $12 by 2020. While this represented a big change for many companies, another part of the act also has made an impact.
The Act included a second provision which entitles all employees to earn one hour of paid sick time for every 30 hours worked. The new law defines the conditions under which paid sick time can be used, such as physical or mental illness, to care for a family member, a public-health emergency, domestic violence, sexual violence, abuse or stalking.
Employees started accruing their earned paid sick time on July 1, 2016, subject to these limitations:
- Employees whose employers have less than 15 employees may only accrue or use 24 hours of earned paid sick time per year.
- Employees whose employers have 15 or more employees may only accrue or use 40 hours of earned paid sick time per year.
Employers are allowed to choose higher accrual and use limits.
How can employers prepare to comply with this new paid sick leave law? Human Resources managers need to be aware of the details, even if you’re an HR department of one. The first step is to educate yourself on the requirements. Explore the Industrial Commission of Arizona (ICA) website where frequently asked questions about the Fair Wages and Healthy Families Act are posted due to the large volume of inquiries received. Join the Society for Human Resource Management, which is an excellent resource for useful articles and hot-button topics about the ever-changing HR landscape. Visit the Employers Council (formerly Mountain States Employers Council), for help deciphering HR laws.
Some employers might worry that the new law will increase employee absenteeism, but there are basic ways to prevent abuse. For example, educate employees about your company’s written leave and absenteeism policies, and be clear about workers’ responsibilities. For those employers who see an increase in Friday and Monday “illnesses,’ good documentation will support disciplinary actions.
Employers also need to ensure the workplace is compliant by prominently posting the new rules about the paid sick leave law, providing the employee with notices, and maintaining the proper records. This includes tracking sick time on employee pay stubs.
Employers are prohibited from discriminating against any person in retaliation for asserting any claim or right under the Act, including requesting or using earned paid sick time; assisting any person in doing so; or informing any person of their rights under the Act.
The minimum penalty is $150 a day for retaliation and a minimum $250 penalty for violating the tracking and pay-stub notice requirements.
All of this is now required by law under the Act.
Arizona is the eighth state to pass this or similar legislation, and at least fifteen cities have passed paid sick leave laws. Labor law experts say the trend likely will continue to grow. Take the time to do your due diligence and safeguard your company to remain in compliance. Business owners may want to consult their independent insurance agent about employer practices liability insurance (EPLI) to help protect their business if an employee decides to sue over paid sick time.
About CopperPoint: Founded in 1925, CopperPoint Insurance Companies is dedicated to protecting and empowering conscientious business owners. Our vision is to be a top-tier regional commercial insurance company and the preferred partner for business owners, agents and brokers in every community we serve. For over 90 years CopperPoint has been a leading provider of workers’ compensation insurance. Today we are a multi-line commercial insurance company, offering products such as general liability, property and casualty, crime, inland marine, commercial auto, cyber and employer practices liability insurance to ensure peace of mind to conscientious business owners, their employees and customers.
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