Leading up to election day, Laura J. Hamblin, a human resources and employment lawyer local to Prescott, wondered at the lack of information regarding Arizona Proposition 206.
“I thought, ‘I can’t believe the business community is not educating voters as to the implications of this law,’” Hamblin said in a roundtable address hosted by the Camp Verde Chamber of Commerce on Dec. 19. “All of the ads were for the proponents of [the proposition] .... Ignorance is not a defense. That’s where the chambers of commerce come in about educating employers.”
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Propostion 206, also known as the Healthy Working Families Initiative, takes effect Sunday, Jan. 1, raising the state’s current $8.05 per hour minimum wage to $10 per hour. It will be increased in increments to $12 by 2020. Tipped wages will be raised accordingly, to no less than $3 less than the regular minimum wage.
The law also requires employers to provide earned paid sick time starting Saturday, July 1. For businesses with 15 or more employees, employees are eligible to earn up to 40 hours of paid annual leave. For businesses with fewer than 15 employees, employees are eligible to earn up to 24 hours.
All employees — except a small few, including babysitters, casual family employees, independent contractors, as well as a minority of small businesses that qualify — are entitled to the wage increase and earn an hour of sick time for every hour worked — whether full time, part time or temporary.
According to Hamblin, the wage increase will have a profound impact, but it is not the aspect most people are focusing on. In part, she added, this is due to election ads, which, in the media, accentuated the effects of the increase.
“The mandatory leave is the aspect employers really need to concentrate on,” Hamblin said, adding that the mandatory paid leave means that employers will not only have to account for the time itself but for keeping track of all paid leave under the law.
Employees will begin accruing sick time on July 1, at which point accrued time — what has been paid out and what remains for an employee’s use — must be accounted for on an employee’s pay stub. Employers must keep a record of these transactions for four years.
Accrued time rolls over into the next calendar year, though an employee may never accrue more than the law stipulates is due to him: 24 or 40 hours, depending on the size of the employer.
“Upon separation, the employer does not have to pay out,” Hamblin said, but noted that rehires are entitled to their accrued sick time prior to leaving.
“And it’s not just being sick,” Hamblin added, outlining the broad definition of what justifies using sick time, including but not limited to: Physical or mental illness, preventative care, closure of a child’s school and domestic violence-related issues.
To justify the reason for one’s absence, an employee need not suffer these conditions himself. An employee can reference the situation of any person he considers family — an “extremely broad definition,” according to Hamblin — when using sick time.
“The law says they cannot ask for a doctor’s note until they’ve been ill for three consecutive days,” Hamblin said. “You can’t ask for documentation unless they’re out [for that time] .... Still, I think most employees are not going to try and work the system.”
This statement prompted sounds of skepticism from participants of the discussion.
In addition, the law stipulates that charges of retaliation can be levied against an employer if they punish an employee within 90 days of a sick leave request.
Steve Goetting, director of the Camp Verde Chamber of Commerce and the owner of a Camp Verde restaurant, said that the law would result in many employees negatively perceiving their peers — some of whom they may not feel deserve what is, in effect, a raise.
Goetting added that employers will also be forced to evaluate who deserves to make an increased wage.
“There are a bunch of people in this community who’ll find they’re not worth $10 an hour,” he said.
“Some businesses might want to think about it before bringing more people on,” Hamblin said.