Whew! Elections are over. Now here is some of the fallout for employers:
As you may already know Arizona voters passed Proposition 206 for an increase to minimum wage from $8.05 to $10 starting January 1st, 2017. Here are a few more details on the changes below.
- Increase the minimum wage to $10 in 2017, $10.50 in 2018, $11.00 in 2019, and $12 in 2020. Starting in 2021, the measure increases the minimum wage with the cost of living.
- Employees who customarily and regularly receive tips or gratuities may be paid a wage of up to $3 less than the minimum wage, as long as weekly tips and wages add up to equal at least the minimum wage in effect.
- The initiative also guaranteed 40 hours of annual paid sick time to employees of businesses with 15 or more employees and 24 hours to those of businesses with less than 15 employees. The measure entitled employees to accrue one hour of paid sick time for every 30 hours worked. The measure permitted earned paid sick time to be utilized for an employee’s medical care, an employee’s need to care for a family member, a public health emergency, or addressing domestic violence.
Paid sick leave does not need to begin accruing until July 1, 2017. So this part of the law will not apply to any current employees until July 1, 2017. Anyone hired after July 1, 2017 can be required to wait at least until the 90th day of employment to be allowed to use the accrued paid sick leave.
From the Prop 206 Website.
What you need to do?
You have multiple ways to handle this situation:
- Give your employees a cost of living raise so that they can maintain their current lifestyle.
- Look at your business for cost inefficiencies. Are you and your employees doing your work the most effective way?
- Are there ways to automate the work so it’s less manual and less labor intensive?
- Can you do more work with less or the same amount of people and still grow?
- Can your market handle a price increase to offset more of your expenses?
- Don’t forget to put a new system in place to accrue PTO for employees starting July 1, 2017.
If you do one or combine a couple of these options you will find that you will weather this change better than you thought. If you need help with any of these strategies please let us know.