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What Tucson Business Owners Need to Know About Prop 206

If you’re a Tucson business owner, no doubt you’ve heard about Proposition 206. Changes from Prop 206 are beginning to take hold in Tucson and small business owners would be wise to pay attention to their new obligations. 

Important points to note are the new increase to the minimum wage and the creation of a new city labor board to hear employee complaints about pay. 

What Is Prop 206?

Proposition 206 is formally titled the Fair Wages and Healthy Families Act. The Act outlines new fair wage requirements and earned paid sick time requirements. It also gives authority to the Industrial Commission of Arizona to enact and enforce these changes. 

Prop 206 was voted on years ago, but recent changes and election outcomes mean that employers should pay attention to avoid new legal issues over employee pay. 

New Tucson Labor Board

A significant element of Prop 206 is that it allowed for the creation of a Tucson labor board. This provision was buried deep in the bill and has received little press. However, it should be the biggest concern for Tucson business owners. 

This city-level labor board holds the authority to enforce laws that affect wages within the Tucson city limits. It gives jurisdiction to the Tucson City Court to hear cases regarding alleged violations of wage policies. 

What Changes Do Employers Need to Know About?

With the many new changes coming, employers should inform themselves of what to expect and how to stay in compliance with the changing laws. 

For guidance, employers can review the Fair Labor Standards Act (FLSA) for any violations that might subject a business to audit. Items to consider include:

Staying informed and cleaning up operations are the best strategies to avoid legal penalties. 

Minimum Wage Increase

Last October, Tucson residents voted to raise the Tucson minimum wage from $12.15 per hour. The wage increase will roll out in stages:

  • $12.80 on January 1, 2022
  • $13 per hour on April 1, 2022
  • $13.50 per hour on January 1, 2023
  • $14.25 per hour on January 1, 2024
  • $15 per hour on January 1, 2025

Employers who fail to comply with these increases and dates may face fines and investigations from the new labor board.  

New Complaint System Initiated 

The labor board proposed in Prop 206 is intended to give employees an avenue for airing grievances against employers over unfair pay practices. 

Now, this board is becoming a reality. 

Beginning June 1, 2022, the city is required to have an employee complaint system active. The system will take both paper and online employee complaints about employer wage practices. This makes it far more convenient for employees to file a complaint than in the past. 

The city has until December 10th to conduct a wage survey investigating industries in Tucson most likely to be in violation of the new wage increase laws. 

Between the complaint system and the impending survey, timely compliance with these new regulations is essential for avoiding fines and other legal issues. 

New Three-Hour Pay Mandate 

One new requirement critical for employers to be aware of is a new minimum pay mandate. Under the Act, “large employers”, defined as those that averaged at least 26 employees (full-time, part-time, or temporary) during the last quarter, must pay at least three hours of minimum wage compensation when:

(1) an employee is scheduled to work at least three hours, the employee timely reports for duty, the employee is able to work the entire shift, and the employer engages the employee for fewer than three hours; or 

(2) an employee is scheduled to work at least three hours and the employer cancels the employee’s shift with less than 24 hours notice 

This new mandate can have a serious financial impact on small business owners, especially in the hospitality and foodservice industries, where tip-based employee pay is lower for some shifts and significantly higher for others.  

COVID-19 Paid Sick Time

Employee grievances over pay practices can also extend to missed work over COVID-19 protocols. Employers should stay informed of their obligations regarding earned sick time and COVID-19. 

Employees are legally permitted to use accrued earned paid sick time for many reasons related to COVID-19, including if they or a family member:

  • Contract COVID-19 
  • Need to test for COVID-19
  • Need to quarantine for COVID-19
  • Need to get vaccinated against COVID-19
  • Experience workplace closure due to a declared state of emergency
  • Must care for a child due to a COVID-19 school closure

If an employee uses all accrued earned paid sick time and needs more time off work due to COVID-19, you should establish a voluntary leave policy consistent with public health guidelines. 

Tucson Small Business Owners Should Prepare Now

Tucson business owners would be wise to begin preparing for the coming changes. Now is the time to review existing policies and set workplace HR management strategies for initiating these mandatory changes. HR preparation is the best way for small business owners to avoid heavy fines, sanctions, and lawsuits. 

Focus HR, Inc. is a Tucson-based, woman-owned company offering unmatched, boutique-style support in human resources. We manage your payroll and your HR to ensure you are remaining compliant with the ever-changing employee laws.

If you need HR advice for your small business, request a consultation today by filling out the form below.

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