When Arizona voters passed Proposition 206, The Fair Wages and Healthy Families Act, on November 8, 2016, they not only approved an increase in Arizona's minimum wage, they also approved a requirement for employers to provide paid sick time to employees.

Minimum Wage Increase

Proposition 206 amended A.R.S. § 23-363 (Minimum Wage) by increasing Arizona's minimum wage, currently $8.05 per hour, as follows:

• to $10 per hour on January 1, 2017;

• to $10.50 per hour on January 1, 2018;

• to $11 per hour on January 1, 2019; and

• to $12 per hour on January 1, 2020.

Beginning January 1, 2021, and on January 1 of successive years, Arizona's minimum wage shall be increased according to increases in the consumer price index.

Proposition 206 did not change the section of A.R.S. § 23-363 that allows employers to pay $3 per hour less than the minimum wage to employees who customarily and regularly receive tips or gratuities.

Paid Sick Time Requirement

Effective July 1, 2017, and under the provisions of A.R.S. § 23-372, private and public employers (excluding the State of Arizona and the United States) must provide paid sick time to their employees as follows:

• Employees of an employer with 15 or more employees shall accrue a minimum of one hour of paid sick time for every 30 hours worked up to a maximum of 40 hours, but they may use not more than 40 hours of paid sick time per year, unless the employer selects a higher limit.

• Employees of an employer with fewer than 15 employees shall accrue a minimum of one hour of paid sick time for every 30 hours worked up to a maximum of 24 hours, but they may use not more than 24 hours of earned paid sick time per year, unless the employer selects a higher limit.

A few other provisions of the new law of which employers should be aware include the following:

• The new law also applies to part-time and temporary employees.

• Paid sick time begins to accrue at the commencement of employment, or on July 1, 2017, whichever is later.

• Unused accrued sick leave carries over from one year to the next, but employers are not required to pay accrued paid sick leave to employees whose employment is terminated for any reason.

• Employees hired after July 1, 2017, can be required to wait until the 90th calendar day after employment begins before using accrued paid sick time.