United States: ICA Issues 18 New Pages Of Paid Sick Leave FAQs: The Top 10 Highlights For Employers

On June 30, 2017—the day before Arizona's new paid sick leave law went into effect—the Industrial Commission of Arizona (ICA) issued 18 pages of new frequently asked questions (FAQs). Some of the FAQs merely restate the draft regulations, while others provide useful examples helping to give color to draft supplemental regulations recently issued. These include examples of how to calculate "same hourly rate" for various employee groups and notations that a commissioned employee's acknowledgement of a handbook policy, setting forth the hourly rate, is sufficient to set the "same hourly rate." Still other FAQs answer questions you never knew you had— including whether employees may take paid sick leave (PSL) to care for their service animals when they're sick. Spoiler alert: The ICA says "no."

Although the ICA warns that case law or statutory guidance may change some or all of its FAQs, all employers should strive to review and conform their policies and practices to the draft regulations and the 39 total pages of ICA FAQs interpreting the paid sick leave law. To help expedite that ongoing process, 10 of the key FAQs that answer the questions we field the most often or could most dramatically impact employer policies and practices are covered here.

1. Pre-July 1, 2017 Paid Leave Insufficient

Prior to the passage of Proposition 206, most employers offered some form of paid time off, whether it was vacation, sick, personal time, or some other amalgamation best suited to their businesses and workforces. Given that PSL went into effect mid-year (on a Saturday to boot), many employers asked (and hoped) that the leave employees had already received or accrued prior to the law's effective date of July 1, 2017 would suffice to meet their paid sick leave obligations for the remainder of 2017. Consistent with our reading and analysis of the law, in its new FAQs, the ICA dealt the fatal blow to this common hope. The FAQs definitively state that "there is no statutory basis for counting leave time accrued or used before July 1, 2017." Remember that the previous FAQs permit employers to prorate accrual and usage during the employer's first partial year starting July 1, 2017, presuming the employer designates a year for purposes of sick leave accrual as anything other than July 1, 2017 to July 1, 2018.

2. On-Call Employees

Health care providers, staffing agencies and other employers that have on-call employees have been particularly flummoxed by how PSL would and could be used by on-call employees. The ICA clarifies that employers may restrict on-call employees' use of earned paid sick time to (1) "periods of time in which the on-call employee is scheduled to work" or (2) "periods of time that the on-call employee would be scheduled to work but for circumstances justifying use of earned paid sick time." The ICA provides three rather simplistic and employee-friendly examples.

For instance, if Sickly Corporation reaches out to Sally and requests she work today and tomorrow, she may use paid sick time for any or all of the two days that Sickly has requested her to work, presuming circumstances justify the use of earned paid sick time. During the oral proceeding conducted by the ICA on the draft regulations on June 5, 2017, several employers and their representatives expressed this very concern: the law's on-call provisions could require employers to dive into their on-call rosters and afford pay sick time to more than one employee who they attempted to call in but who decided to use paid sick time before finding someone available.

3. No Windfall at Reinstatement If PSL Already Paid Out

The ICA fills in an important gap about reinstatement of PSL if an employee is rehired. If the employer voluntarily pays out earned, unused sick leave at termination AND the employee "accepted the payment" for PSL, then the employee is not entitled to have that accrued PSL reinstated even if the rehire occurs within nine months of the termination. Importantly, this also means the reinstated employee is not entitled to take such paid out accrued PSL as unpaid leave.

4. Employee's Failure to Follow Notice Requirements = No PSL

One of the biggest challenges employers continue to raise is how or when they can hold employees accountable to notice requirements, while not exposing themselves to legal risk under the law's broad and presumptive retaliation standard. The ICA clarifies several points on notification for unforeseeable PSL. Employers may require employees to follow a written policy containing procedures to provide notice when PSL is unforeseeable. While employers must allow employees to request PSL through oral, written, or electronic means, if an employer has provided its employees with a copy of a written policy for providing notice of PSL, the employer may refuse to designate time as PSL if the employee fails to comply with the written notice requirements.

For example, if an employer's PSL policy in its employee handbook states (as statutorily required) that employees may provide electronic, oral, or written notice of their need for PSL and requires the employee to also call a specific absence hotline to report his or her absence, the employer may refuse to designate the absence as PSL if the employee failed to provide the required notice set forth in the written policy of which he or she had notice. Keep in mind that the employee must be provided a copy of the written policy, the policy cannot discriminate against employees using PSL, and the employee should be afforded the chance to provide a "reasonable justification"— such as an emergency or incapacity—for failing to follow the written policy.

5. Smallest Increment of Usable Earned Paid Sick Leave

Unfortunately, the latest FAQ update reinserted ambiguity to a question we previously thought to be settled. The draft regulations provide an option for employers to use either time clock increments (which may be as small as tenths of an hour) or increments set by a PTO program (which typically use longer increments, such as an hour). According to the FAQs,

Earned paid sick time can either be used in hourly increments or the smallest increment that the employer's payroll system uses to account for absences or use of other time, whichever is smaller. For example, if an employer's payroll system accounts for absences or use of other time in 6 minute increments (a tenth of an hour), an employee may use earned paid sick time in this same increment.

The ICA had indicated that employers that plan to combine PTO with PST could use the same time off increments for all PTO, even if their time-keeping systems used much shorter increments for attendance purposes, thereby eliminating uncertainty about using the shorter increment.

Employers encouraged the ICA to resolve this ambiguity in writing, which we believe led to the inclusion of "other paid time off" in the draft regulation.

The Industrial Commission has proposed rules that define the "smallest increment that the employer's payroll system uses to account for absences or use of other time" as the smallest increment of time that an employer utilizes, by policy or practice, to account for absences or use of other paid time off.

However, the FAQ continues to retain the "whichever is smaller" language in its discussion, which suggests that employers do not really have a choice of which increment applies.

6. Keeping Track of "Equivalent Time Off"

The draft regulations finally fill in many of the gaps left by the statute's failure to address the nuts and bolts of how to integrate PSL with an existing PTO program that provides equivalent or better benefits than the statute requires. Perhaps the most glaring gap was how employers were supposed to keep track of time off on paycheck stubs for combined PSL/PTO programs. The answer is to allow employers to blend the data, which the supplemental FAQ helpfully explains as follows:

[W]hen an employee uses equivalent paid time (for earned paid sick time, vacation, or another reasons) the employer may count that time as "taken" and "received" on the employee's regular paycheck.

So, true combo programs can show the combined time off information on employees' paystubs without having to distinguish PSL. Notably, the FAQs still allow employers to separately track PSL from their PTO, if they desire to do so, but it is not required.

7. The Carry Forward/Accrual Conundrum

Employers that combine their PST obligations with existing PTO programs should remain vigilant of the statute's tricky equivalency requirements. For example, one of the supplemental FAQs states that "an employee retains the right to accrue additional earned paid sick time in a subsequent year, regardless of the amount of earned paid sick time carried over to the subsequent year." Without further clarification from ICA, this could spell trouble for employers with combo PSL/PTO programs that cap accruals—even if those accrual caps are greater than the maximum PST accrual and carry forward amounts combined.

Further Important Questions Answered

Finally, in addition to resolving the uncertainty of Fido's status as a "family member," the supplemental FAQs also address a number of other questions on employers' minds that deserve honorable mention here:

8. May someone other than the employee give an employer notice of the employee's need for PSL?

In "appropriate circumstances" an "authorized person" (such as a friend or family member) may give notice of PSL. The FAQ suggests that "appropriate" means when the employee is incapable of giving the notice him or herself due to incapacity.

9. Are perfect attendance bonuses still legal?

Yes, "provided that employees who have used other leave types are similarly disqualified from perfect attendance bonuses."

10. How does PSL apply to "commonly-owned" businesses?

Not surprisingly, the ICA takes the position that businesses with identical or related ownership, or with shared management components, employee pools, or control over operations likely will be viewed as a single employer for purposes of determining the statute's application, such as to determine total number of employees. The FAQs provide a list of which factors ICA will consider for common enterprise determination.

We will continue to report on any further guidance from the ICA on the newly-effective Arizona paid sick time law. Stay tuned!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions