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by Jen Leigh on December 5, 2016

Arizona Employers Need to Prepare For Increases In Minimum Wage and Paid Sick Time


Proposition 206, the Fair Wages and Healthy Families Act (the “Act”), was a ballot initiative on the November 8, 2016 Arizona ballot. The Act establishes a new state minimum wage effective January 1, 2017, and entitles employees to accrue earned paid sick time beginning July 1, 2017.

Updated Guidance Available on Arizona Paid Sick Leave, click here.

If you employ Arizona employees then you'll need to ensure you're ready for these changes.  

Beginning January 1, 2017, the Arizona minimum wage will be increased to $10.00 per hour. 

Under Proposition 206, the Fair Wages and Healthy Families Act (the “Act”), Arizona minimum wage will increase to $10.50 per hour in 2018; $11.00 per hour in 2019; and $12.00 per hour in 2020. On January 1, 2021, the Arizona minimum wage will increase each year by the cost of living. Employers required to comply with the Act’s minimum wage requirements will be required to pay each employee wages not less than the applicable minimum wage for each hour worked. For more information about which employers are subject to Arizona’s minimum wage laws, see Which employers are subject to the Arizona’s minimum wage laws? Employers are still permitted to pay employees receiving tips up to $3.00 per hour less than the minimum wage, provided that the employees earn at least minimum wage for all hours worked each week (when tips are included). For further information regarding payment of minimum wages to tipped employees, see What is the Arizona minimum wage for tipped employees?

Beginning July 1, 2017 Arizona Employers will be Required to Provide Paid Sick Leave

Earned paid sick time is sick time accrued by an employee that is compensated at the same hourly rate and with the same benefits, including health care benefits, as the employee normally earns during hours worked. You'll want to create an Arizona Sick Leave Policy that incorporates the following:
 

Accrual Rules

  1. Employees must earn at least one hour of sick leave for every 30 hours worked. 

  • Employers with 14 or fewer employees may cap yearly accrual and use at 24 hours.

  • Employers with 15 or more employees may cap yearly accrual and use at 40 hours. 

  • In lieu of hour-by-hour accrual, employers may provide employees with all the leave they are expected to earn at the beginning of the year and make it available for immediate use.

Use and Carryover

  • Employees hired before July 1, 2017, will be able to use sick leave immediately as accrued.

  • Employers can enforce a 90-day waiting period prior to use for employees hired on or after July 1, 2017.

  • Employees can use leave for their own or a family member’s physical or mental illness, injury, or preventative care; if they or a family member are the victim of domestic violence, sexual violence, abuse, or stalking; or in the case of public health emergencies.

  • Sick leave may be used in increments of one hour or the smallest increment the employer uses to track other time or absences, whichever is smaller.

  • Unused sick time will carry over into a new year (yearly use caps still apply).

  • If employers do not want to allow carryover, they can pay employees for unused sick time at the end of the year and then provide them with a new bank of time equal to the amount they are expected to earn for the entire year. 

Administration

  • Sick time must be paid at an employee’s regular rate of pay or minimum wage, whichever is greater (no tip credit may be applied).

  • Employees may not be required to find their replacement when using sick leave.

  • Employers may not require proof of the need for leave until an employee has missed three or more consecutive workdays. 

  • Employers may not request or require that the documentation provide details about the condition or situation that led to the need for leave.

  • Unused sick time does not need to be paid out at termination, but employees who are rehired within nine months must have their previously accrued but unused sick time restored.

  • Employers must post a notice in a conspicuous location in the workplace. The Industrial Commission of Arizona has created a compliant poster that is available for download from within the Inflection HR's HR Support Center.

To learn more, be sure to check out our Arizona Sick Leave Guide. While Inflection HR clients can easily find more information on HR Support Center by searching “Arizona Sick Leave.” Additionally, the Industrial Commission of Arizona has posted extensive FAQs on the sick leave law, which are available on the HR Support Center.

Jen Leigh

Jen Leigh is a Senior Product Specialist with Inflection HR's Cloud Based HR and Workforce Management Solutions. Connect with Jenni and the rest of the Inflection HR Team on Twitter, Facebook, or LinkedIn.