Arizona Paid Sick Leave Law: Payroll Compliance Explained

Managing paid sick leave in Arizona can be confusing for employers. Since the Fair Wages and Healthy Families Act went into effect, businesses of all sizes must provide sick time to their employees. The rules vary depending on company size, and payroll teams are responsible for tracking accrual, carryover, and usage correctly.

This guide explains how Arizona’s paid sick leave law works, what employers must include in payroll systems, and the penalties for non-compliance. You’ll also see examples of accrual, carryover rules, and resources to help you keep your payroll practices compliant.

Quick Answer

Under Arizona’s Fair Wages and Healthy Families Act, employees earn 1 hour of paid sick time for every 30 hours worked. Employers with 15 or more employees must provide up to 40 hours per year, while smaller employers must provide 24 hours per year. Sick leave can be used for personal illness, caring for family, medical appointments, or issues related to domestic violence. Employers must track accruals, carryover, and pay at the employee’s regular rate of pay.

Who Is Covered by Arizona’s Sick Leave Law?

• All employees—full-time, part-time, and temporary workers—are eligible.
• Exemptions are limited, meaning nearly every Arizona worker earns sick leave.
• Sick time begins accruing at the start of employment and can usually be used after 90 days.

How Sick Leave Accrues in Arizona

• Accrual rate: 1 hour of paid sick leave for every 30 hours worked.
• Annual limits:
  • Employers with 15+ workers: Up to 40 hours per year.
  • Employers with <15 workers: Up to 24 hours per year.
• Carryover: Unused sick time can roll into the next year, but employers may cap annual usage at 40 or 24 hours depending on size.
• Frontloading option: Employers can grant the full yearly allotment at once instead of tracking accrual.

👉 To see how this affects payroll calculations, try the Arizona Sick Pay Calculator.

How Employers Must Handle Sick Leave in Payroll

• Rate of pay: Sick leave must be paid at the employee’s normal hourly rate (or the salaried equivalent).
• Pay stub requirements: Accrued, used, and available sick time must be shown on pay statements or in accessible records.
• Recordkeeping: Employers must keep sick leave records for at least four years.
• Documentation: Employers can require documentation if an employee is absent three or more consecutive days.

Employer Compliance Checklist

1. Track accruals for every employee, including part-time staff.
2. Show sick leave balances on pay stubs or through online payroll systems.
3. Train supervisors to approve and document sick time correctly.
4. Post the required notice of employee rights in the workplace.
5. Retain records for at least four years as required by Arizona law.

👉 For quick calculations, check the Arizona Paycheck Deductions Calculator to see how sick leave interacts with other payroll deductions.

Penalties for Non-Compliance

Failing to comply with Arizona’s paid sick leave requirements can lead to:

• Back pay owed to employees
• Civil fines and penalties
• Attorney’s fees
• Potential lawsuits and reputational damage

FAQs on Arizona Paid Sick Leave

How much sick leave do Arizona employees earn per year?
Up to 24 hours for small employers and up to 40 hours for larger employers.

Can employers frontload sick leave instead of tracking it hourly?
Yes, employers may give the full yearly allotment at once.

Does unused sick time carry over?
Yes, but usage can be capped at the yearly maximum.

What can sick leave be used for?
Personal illness, medical appointments, caring for family, and domestic violence or safety-related issues.

How soon can new employees use accrued sick time?
After 90 days of employment.