Update on Arizona's and California's Paid Sick Leave Laws

May 11, 2017

Every organization in Arizona is in the midst of preparing for implementing Paid Sick Leave (PSL) on July 1, 2017.  In case you missed it the Arizona Industrial Commission issued proposed rules on May 5, 2017.  You can find them here.  The public can provide comments to the proposed rules by June 5.  Also, there is a public hearing on June 5 which anyone can attend.  This is your chance to provide input into the process!

 

I have to say the proposed rules are rather disappointing because they do not address the many questions most organizations have.  With respect to PSL the proposed rules do provide information regarding how to pay someone who is using PSL.  As we know, when an employee uses PSL they are supposed to be paid at the same hourly rate and with the same benefits as the employee earns during hours worked.  According to the proposed rules, shift differentials and premiums meant to compensate an employee for work performed under different conditions, such as hazard pay, are to be included when computing an employee’s same hourly rate.  The issues come up when employees are paid multiple hourly rates, commissions, piece rate and other types of compensation.  Per the proposed rules when an employee is paid multiple hourly rates, the rate to be paid when on PSL is to be determined in the following order of priority:

  • Wages the employee would have been paid for the period of time in which sick time is used

  • Weighted average of all hourly rates of pay during the previous pay period

For employees that are paid on a commission, piece-rate, or fee-for-service, the rate to be paid when on PSL is to be determined in the following order of priority:

  • Hourly rate agreed upon by the employer and employee, if previously established

  • Wage the employee would have been paid for the period of time in which sick time is used

  • Reasonable estimation of wages the employee would have been paid for the period of time in which sick time is used

  • Weighted average of all hourly rates of pay during the previous 90 days, if the employee regularly worked during the previous 90-day period

It is important to remember that in no event may an employee be paid below minimum wage when using PSL.

 

One additional question that was addressed in the proposed rules is the amount of unused PSL that must be carried over to the next year.  For an employee of an employer with 15 or more employees, an employee may carry over a maximum of 40 hours to the following year.  For an employee of an employee with less than 15 employees, an employee may carry over a maximum of 24 hours to the following year.

 

We will still have to await guidance on the many other unanswered questions.  It is likely that the current proposed rules will not be effective until after July 1, 2017. 

 

Now let’s briefly turn to California.  If your organization has employees in California then it is important to note that the Department of Industrial Relations updated their FAQ’s on March 29.  You can find them here.  These primarily address grandfathered PTO plans.  However, the updated FAQ’s do address how to handle attendance problems.  We know that an employer cannot discipline an employee for using PSL.  However, many situations are more complex than that.  The FAQ’s do state that if an employee has accrued PSL available, an employer may not deny the employee the right to use those accrued days and may not discipline the employee for doing so.  However, if an employee does not have any PSL available and if their absence would violate an attendance police then the PSL law does not prohibit an employee for disciplining the employee for that absence.

 

While we are struggling with the implementation of PSL, we sometimes need to look outside at the beauty and wonder that Arizona has to provide.  The above pictures was taken in April 2017 hiking down the South Kaibab trail in the Grand Canyon.  We made it to Phantom Ranch and up the Bright Angel trail in a day…. Barely!

 

 

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