Arizona, following the trend in neighboring States like California, has initiative 206 on the November 8 ballot.  It seems probable at this point that the initiative may pass.  If it does, beginning January 1, the minimum wage will rise to $10 per hour and eventually get to $12 per hour by 2020.  Voters in Flagstaff are voting to raise the limit to $15 per hour.

Included in the proposition is also the addition of Paid Sick Leave.  Similar to the law established in California, it provides that the employee earns one hour of sick pay for every 30 hours worked.  Employers with less than 15 employees will have to provide 24 hours of sick pay and those over 15 employees will provide up to 40 hours per year.  The unused hours can roll over to the next year.  Alternatively, the employer can “front-load” all hours anticipated at the beginning of the regulation, which is July 1, 2017.  There is no payout of unused hours at the time of termination.  However, if an employee comes back to work for  you within 9 months they are started right where they left off and they can use any hours that were left on the books.

There are more rules to this, but let me warn everyone that retaliation or arguing with an employee about using their earned sick hours will not go well for the employer.  Experience in California has shown that trying to bully employees or retaliate for the use of this sick pay does not go well in court for the employer and the fines can be very expensive.

Below is from the review of the Proposition with links to read the rest of the bill.  It is pretty easy to read and there is a lot of information that bookkeepers and employers will have to know about this law.  As always, HR Mobile Services, Inc. has experience in these laws and will help guide the transition including the changes to your employee hire packets.

The Minimum Wage and Paid Time Off Initiative, also known as Proposition 206, is on the November 8, 2016, ballot in Arizona as an initiated state statute.

A “yes” vote supports raising the minimum wage to $10 in 2017, and then incrementally to $12 by 2020, and creating a right to paid sick time off from employment.
A “no” vote opposes this measure, keeping the minimum wage at $8.05, adjusted for cost of living, and retaining employers’ ability to decide whether or not to offer paid sick time off.

In November 2016, voters in Colorado and Maine are also voting on measures to increase their state minimum wages to $12. In Washington, citizens are voting on an initiative to increase the minimum wage to $13.50.


Minimum wage in Arizona

Arizona’s minimum wage is $8.05 per hour in 2016. The federal minimum wage is $7.25. Due to Proposition 202 of 2006, the state’s minimum wage increases with the cost-of-living. Without Proposition 206, Arizona’s minimum wage is expected to increase to $8.15 in 2017.[1] In November 2016, voters in Flagstaff, Arizona, are voting on whether to increase their city’s minimum wage to $15 an hour.[2]

Initiative design

Proposition 206 would increase the minimum wage to $10 in 2017, $10.50 in 2018, $11.00 in 2019, and $12 in 2020. Starting in 2021, the measure would increase the minimum wage with the cost of living. The measure retains Arizona’s law regarding tipping, which permits employers to pay employees who receive tips up to $3.00 less than the minimum wage.[3][4]

The initiative would also guarantee 40 hours of annual paid sick time to employees of businesses with 15 or more employees and 24 hours to those of businesses with less than 15 employees. Employees would be entitled to accrue one hour of paid sick time for every 30 hours worked. The measure would permit earned paid sick time to be utilized for an employee’s medical care, an employee’s need to care for a family member, a public health emergency, or addressing domestic violence.

State of ballot measure campaigns

Supporters had raised $1.5 million as of October 10, 2016. Living United for Change in Arizona had donated almost $1 million to the campaign. The Arizona Chamber of Commerce launched an opposition campaign, Protect Arizona Jobs, on September 19, 2016, and is expecting to spend over $1 million. Polls indicate that around 56 percent of Arizonans support Proposition 206.

Text of measure

Ballot title

The ballot title is as follows:[5]

INCREASES THE MINIMUM WAGE FROM $8.05 PER HOUR IN 2016 TO $12.00 PER HOUR BY 2020 AND ESTABLISHES THE RIGHT TO EARN PAID SICK TIME AWAY FROM EMPLOYMENT.A “yes” vote shall have the effect of increasing the minimum wage from $8.05 per hour in 2016 to $10.00 per hour in 2017, and then incrementally increasing the minimum wage to $12.00 per hour by the year 2020; entitles employees to earn 1 hour of paid sick time for every 30 hours worked with limits based upon the size of the employer; broadly defining the conditions under which paid sick time may be taken, including mental or physical illness, care of a family member, a public health emergency, or absence due to domestic violence, sexual violence, abuse or stalking; prohibiting various forms of retaliation against employees for exercising any rights under the law; and requiring employers to provide various notices to employees about the law.

A “no” vote shall have the effect of retaining the existing minimum wage (along with the existing method for annually increasing the minimum wage for inflation) and retaining employers’ existing ability to determine their own earned paid sick leave policy.[6]

Ballot summary

The ballot summary is as follows:[7]

The Fair Wages and Healthy Families Initiative increases minimum wage to $10 in 2017 then gradually to $12 by 2020; provides 40 hours annual “earned paid sick time” for employees of large employers (24 hours for those of small employers); time accrues at one hour earned for every 30 hours worked; time may be used to address circumstances caused by illness of employee or employee’s family, public health emergencies, or domestic violence; prohibits retaliating against employees using the benefit; allows for more generous paid time-off policies; and exempts employees who expressly waive the benefit under collective bargaining agreements.[6]

Full text

The full text of the measure can be found here.

Fiscal analysis

See also: Fiscal analysis statement

An extended summary of the fiscal analysis statement can be found here.

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