It’s been 4 years since Arizona’s Fair Wages and Healthy Families Act went into effect. While the Act’s initial passage created a fair amount of stress and confusion, most employers believe they’ve gotten the technical aspects of earned paid sick time (EPST) under control. Recently, however, employers have seen an uptick in claims by employees alleging their rights under the Act have been violated and/or they were retaliated against for using sick leave.

Background

The Industrial Commission of Arizona (ICA) investigates claims of noncompliance and retaliation pertaining to EPST. If a violation is found, the enforcement regulations say:

• Employers can be subject to fines, monitoring, and inspections.
• They will have to repay employees for any sick pay denied, including interest, and an additional amount of twice the withheld wages.

Moreover, if the ICA determines a retaliation, discrimination, confidentiality, or nondisclosure violation has occurred, it can issue penalties, direct the employer to cease and desist from the violation, and require it to rehire or reinstate the employee.

In defending against retaliation claims involving EPST, the employer faces a relatively high burden of proof under the Act: For any adverse employment action (e.g., a termination) that occurs within 90 days of an employee taking paid sick leave, it’s presumed to be retaliatory and can be overcome only by clear and convincing evidence the action was taken for reasons other than retaliation. To be clear, when the ICA is investigating a claim, it will ask for and expect employers to provide the evidence.

What Employers Can Do

Given the recent increase in claims, compliance with the Act remains critical. The good news is there’s a seemingly simple step you can take to help defend a claim (if and when one is filed): documentation! Here are some examples you can use:

Attendance policies. As noted in the ICA itself and further explained in the Act’s frequently asked questions, you may still hold employees accountable for attendance. A written policy should outline your expectations for employees on how to report an absence. If you deny paid sick leave or take adverse action against an individual for not following your policy, the following steps are key:

• You must actually have a written policy in place.
• The policy must be consistent with the ICA’s guidance.
• You must consistently enforce it with all employees.
• Any violations should be clearly documented.

Progressive discipline. In defending an EPST retaliation claim, even if the performance issue or violation of company policy doesn’t involve attendance, you’ll still need to submit evidence to the ICA to show why the adverse action was taken. The proof can include disciplinary action forms, counseling notices, e-mails, text messages, or anything else very clearly showing the action wasn’t taken because the employee requested or took protected paid sick leave.

One best practice is to show you took progressive disciplinary action to try to address an employee’s issues before deciding to terminate.

Documentation for terminations. Of course, there are bound to be occasions when the progressive disciplinary process simply doesn’t apply. One instance occurs during an employee reduction in force (RIF).

It should seem obvious a RIF has nothing to do with paid sick leave, but you would still be required to prove it if you trigger the action within 90 days of the employee taking the leave. Some examples of appropriate documentation would include:

• Termination forms,
• Memos from management to all affected employees, or
• Payroll reports showing all employees were affected.

Takeaway

Complying with Arizona’s EPST requirements can be tricky business. Even if you’re technically doing everything right, defending against employees’ claims can be quite difficult. Making sure you have supporting documentation in place can certainly help!

Leigh Anne Ciccarelli, an attorney with Weiss Brown PLLCin Scottsdale, Arizona, practices employment and labor law, assisting management/employers with day-to-day HR issues and employment law compliance. She also regularly provides training for her clients on HR best practices and compliance topics. You can reach her at lac@weissbrown.com or 480-327-6681.