Businesses prep for mandatory paid sick leave

Arizona’s new law mandating paid sick leave starts July 1, and employers had better be prepared for it.

Businesses and non-profit groups could face penalties for failing to keep adequate records or post sufficient notice, and they could incur damages for failing to provide paid sick time. Employers who retaliate against workers exercising their rights could face fines of at least $150 per day, say attorneys at Gallagher & Kennedy, a Phoenix law firm that held a workshop to alert employers of the requirements.

The law mandating as many as 40 hours of paid sick leave — which was approved by voters last November as part of the Proposition 206 package that also hiked the state’s minimum wage — applies to virtually all businesses and nonprofits with at least one Arizona employee. That includes entities not headquartered in the state.

The only exceptions involve people employed by Arizona’s state government or the federal government, as well as sole proprietors.

All this means most Arizona workers — whether full-time or part-time, including temporary and seasonal staff — now will receive paid sick time. They will be able to use this benefit for a variety of reasons, with few questions asked.

The minimum requirements are 24 hours of paid sick time off annually for businesses with 14 or fewer workers, or 40 hours off for entities with 15 or more people. Employees begin accruing sick leave on the date they were hired or July 1, 2017, whichever is later. However, workers hired after July 1 might need to wait up to 90 days before using time off, said Jodi Bohr, an attorney at Gallagher & Kennedy.

Given the near-universality of the law and the fact many employers aren’t well versed on the topic, sanctions await the unwary. That’s in addition to possibly paying the fees of attorneys representing aggrieved workers.

“If they can prove $1 of unpaid sick time and if they prevail in a lawsuit, attorneys will get 100 percent of their fees,” warned Donald Peder Johnsen of Gallagher & Kennedy. The ability to collect fees will give attorneys incentive to pursue cases, he added.

The basic provisions of the law were covered in a prior article in The Arizona Republic. Here are other details to note:

The law could force certain businesses to clarify whether their workers are independent contractors or employees.

It’s not always clear whether a worker is an employee or an independent contractor. Employees are entitled to receive paid sick-time off; contractors aren’t. The general rule is that if you issue a W-2 to a worker, that person is an employee entitled to the benefit, said Bohr.

Employers have limited rights to ask workers why they’re taking time off.

The law allows paid leave for various reasons besides an actual sickness or injury. Workers also may use sick leave for other problems, including those tied to domestic violence, sexual abuse, stalking or the closing of a child’s school owing to a public health emergency.

Acceptable reasons also can include taking time off to meet with an attorney, arrange shelter services or secure safe housing. Also, time can be used to deal with problems on behalf of family members. The definition of family members is quite broad, including siblings, grandparents, in-laws and others, said Johnsen.

An employer can request proof or documentation only after a worker has been absent three straight days.

When proof is required, it can come in many forms such as a doctor’s note, a police report, a letter from an attorney or simply a worker’s own statement that he or she needed time off.

“The documentation doesn’t mean a big explanation of what happened to the employee — just that there was a need for leave,” Johnsen said. Almost anything can qualify as valid documentation. “An employee’s own signed statement is sufficient,” he said.

At any rate, businesses can’t request documentation or other proof until a worker has been absent for three straight days.

Employers generally will be required to grant time off.

While employers typically will need to grant time off when requested, workers must make “good faith” and “reasonable” efforts to give advance notice and not “unduly disrupt the operations” of a business or non-profit, Johnsen added.

The terms cited above haven’t yet been defined and — like some other aspects of the law — might not be clarified for a year or two. In the meantime, Johnsen said he’s advising employers to “err on the side of caution and give people time off.”

Paid sick leave is separate from vacation time. Companies and non-profits don’t need to provide paid vacation time under the law. Even though the trend lately has been for employers to lump paid time off for a number of purposes — sick leave, vacation days and holidays — Johnsen recommends having a separate written policy covering paid sick time only.