How Prop 206 Impacts Arizona Businesses

Proposition 206 increased the minimum wage in Arizona to $10 an hour starting on January 1, 2017. The minimum wage is projected to increase to $12 an hour by 2020.

The initiative has been challenged on the grounds that it had two different subjects in a single proposition: the minimum wage increase and new provisions for paid sick leave (PSL). The Arizona Supreme Court has agreed to review the case.

Prepare Now to Avoid Employment Disputes

Some businesses have expressed concerns about satisfying the minimum wage requirement, but the paid sick leave provision may actually cause more problems for some employers. The paid sick leave requirements include the following provisions:

•Employers with 15 or more employees must permit employees to collect up to 40 hours of paid sick time (PST) per year and to allow use of up to 40 hours of accrued PST per year.

•Employers with fewer than 15 employees must permit employees to accumulate up to 24 hours of PST per year and to allow use of up to 24 hours of collected PST per year.

Part-time employees and temporary workers are considered employees under this provisions. The PST can be used to address the employee’s illness, an illness in the employee’s family, public health emergencies, or domestic violence issues.

PST begins to accumulate on July 1, 2017.

To avoid any employment disputes, employers should be aware of how they can comply with the statute, as well as the potential penalties for failing to comply. Employees should also educate themselves on the new law, so that they are aware of their legal rights to paid time off.

An employer who fails to pay the required minimum wage or PSL will be required to pay the employee the balance of the wages or PSL, as well as an amount equal to twice the unpaid wages or unpaid PSL. An employer who retaliates against an employee for using the required PSL will be required to pay a penalty of at least $150 per day for each day that the violation occurred.

Arizona businesses should be preparing now for these upcoming changes to ensure compliance with the new law and avoid employment disputes.

If you’re facing a wage dispute, you need an experienced business attorney on your side. Chernoff Law Firm regularly handles business disputes, and we use creative solutions to solve your toughest problems. Contact us today to speak with one of our business litigation attorneys.

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