Arizona Fair Wages and Healthy Families Act

arizona fair wages and healthy families actThe Fair Wages and Healthy Families Act imposes numerous requirements on employers.  This blogpost will provide an overview on these requirements.  This is not an exhaustive list.  If you are a business owner who employs employees, you should always consult an attorney to ensure you are following Arizona employment law.

The Fair Wages and Health Families Act (Act) was a ballot initiative, Proposition 206, that was voted by the people into law on November 8, 2016.  Broadly, the Act implemented a new state minimum wage that increases each year by a certain amount.  After so many years, the minimum wage is then tied to cost of living.  It also entitles employees a certain number of hours every year of paid sick time.

Employers Affected

In the minimum wage context, Arizona law defines “employer” extremely broadly. Employer means any corporation, proprietorship, partnership, joint venture, limited liability company, trust, association, political subdivision of the state, individual or other entity acting directly or indirectly in the interest of an employer in relation to an employee.

The Act does not apply to employers like the state of Arizona, the United States federal government, or small businesses.

For the earned paid sick time, “employer” is defined broadly as well but does not exempt small business. It still does not include the state of Arizona for the United States federal government.

Posting and Recordkeeping Requirements

Employers are required to comply with notice, posting, and recordkeeping requirements relating to minimum wage. Requirements include:

  1. Posting minimum wage notices in the workplace;
  2. Providing employees with the employer’s business name, address, and telephone number in writing upon hire; and
  3. Maintaining payroll records in accordance with Arizona laws.

Employers subject to earned paid sick time, the requirements are similar.  These include:

  1. Posting earned paid sick time notices in the workplace;
  2. Providing employees with the employer’s business name, address, and telephone number in writing upon hire;
  3. Providing employees with a notice that informs them of their rights and responsibilities under the Act; and
  4. Maintaining payroll records in accordance with Arizona law.

An employer is required to keep records for the minimum wage law for at least four years. If an employer violates the recordkeeping requirements, an employer is subject to a civil penalty of at least $250 for the first violating and at least $1,000 for each subsequent or willful violation. An employer may be under special monitoring and inspections.  If an employer does not keep proper records, it will be presumed that the employer did not pay the required minimum wage or earned paid sick time in a disputed case.

Click here for additional information on Arizona paid sick leave.

Exempt From the Minimum Wage Law

The following are exempt from the Arizona minimum wage requirements:

  • A person who is employed by a parent or a sibling
  • A person who is employed performing babysitting services in the employer’s home on a casual basis
  • A person employed by the State of Arizona or the United States government
  • A small business grossing less than $500,000 in annual revenue, if that small business is not required to pay minimum wage to any of its employees under the federal Fair Labor Standards Act.

Required Earned Paid Sick Time

For employers with 15 or more employees, employees must accrue a minimum of one hour earned paid sick time for every 30 hours.  However, employees are not entitled to accrue or use more than 40 hours, unless the employer selects a higher limit.

For employers with fewer than 15 employees, employees are entitled to accrue a minimum of one hour of earned paid sick time for every 30 hours worked, but they are not entitled to accrue or use more than 24 hours of earned paid sick time per year, unless the employer sets a higher limit.

The Industrial Commission of Arizona is the government entity responsible for enforcing the Act. The Commission posted an extensive FAQ for the Act and can be extremely helpful for employers. It can be found here.