If you are an employer with even one Arizona employee, you only have until July 1, 2017 to implement a paid sick leave policy, if you have not already done so. Pursuant to Prop. 206, which was passed as a ballot measure in November 2016, all Arizona employers (even those exempt from coverage under the state’s minimum wage law) must provide their employees (including full-time, part-time and temporary workers) with at least one hour of paid sick leave for every 30 hours worked, up to a cap of at least 24 or 40 hours annually, depending on employer size.

The law contains a number of unique provisions, such as requiring the rollover of unused, accrued paid sick leave at year-end (or payment of the cash equivalent of those hours); options for limiting annual usage of paid sick leave; protections against retaliation; confidentiality obligations; and detailed notice requirements. Failure to adhere to the law’s recordkeeping requirements could result in an enforcement action by the Industrial Commission of Arizona, where non-compliant employers could be exposed to substantial civil penalties (ranging from US$250 for a first-time violation to at least US$1,000 for each subsequent or willful violation), plus special monitoring, inspections and other equitable relief. Employers who retaliate against employees for exercising their rights to request or use sick leave or report or participate in investigations related to sick leave can be ordered to pay compensatory damages in an amount not less than US$150 for each day the violation continued. Employees also have the option of pursuing private courses of action in which they can recover three times the value of any paid sick leave that was not provided to them, plus interest, along with an award of lawyers’ fees and costs, if successful.

If you do not yet offer paid sick leave to your Arizona employees, it is critical that you adopt a compliant paid sick leave policy and implement it by the July 1 deadline. If you already have a paid sick leave policy or paid time off (PTO) policy in place, we recommend that you review the policy with counsel to ensure compliance with the new law and proposed regulations.