The Industrial Commission of Arizona’s (ICA) supplemental proposed rules under Arizona’s new paid sick time (PST) law provide much-needed clarity on how the law affects employers with equivalent paid time off (PTO) policies. According to the ICA, employers do not need to separately track, record, or provide PST if they give employees equivalent PTO.
The proposed rules define “equivalent paid time off” as “paid time provided under a paid leave policy, such as a paid time off policy, that makes available an amount of paid leave sufficient to meet the accrual requirements of the Act that may be used for the same purposes and under the same conditions as earned paid sick time.” The ICA repeatedly used that terminology throughout its proposed rules, clearing up prior confusion surrounding how the PST law affects employers who provide equivalent PTO.
For example, the PST law requires employers to record the amount of PST available to and received by each employee during that year to date. It was previously unclear if employers who provide equivalent PTO were nevertheless required to separately track and record PST. The ICA’s supplement clarifies that employers can simply track and record equivalent PTO.
Likewise, it was previously unclear if employers who provide equivalent PTO were nevertheless required to carve out and reserve a minimum number of hours for employees to use for the law’s specified PST purposes, which include an employee or family member’s medical needs, public health emergencies, exposure to communicable disease, domestic violence, sexual violence, abuse, or stalking. The ICA’s supplement clarifies that employers with equivalent PTO policies do not need to reserve a block of time for PST purposes. Rather, when an employee receives pay under an equivalent PTO policy for PST purposes or other purposes, the employer may treat it as PST pay.
The proposed rules are not final and may change before going into effect, but they provide valuable insight into how the ICA interprets the new PST law. The ICA will hold a hearing on the proposed rules on August 8 at 9:00 a.m. in the ICA auditorium in Phoenix. Employers may submit written comments on the proposed rules until August 8.
For more information on the ICA’s proposed rules and answers to FAQs, check out our other ICA Guidance posts.