ELECTION RESULTS 2016: IMPACT ON ARIZONA EMPLOYERS Joshua Woodard (602) 382-6281 jwoodard@swlaw.com

Topics Impact of Trump Presidency on employment and immigration Prop 206 – Minimum Wage Increase and Paid Sick Leave

The Trump Presidency – his 100 day plan Cancel every unconstitutional executive action, memorandum and order issued by President Obama. Begin selecting replacement for Justice Scalia. Cancel all funding to Sanctuary Cities. Begin removing more than 2 million criminal illegal immigrants and cancel visas to foreign countries that won’t take them back. Suspend immigration from terror-prone regions where vetting cannot safely occur. All vetting for people entering the U.S. will be extreme vetting.

Labor Secretary Nominee – Andrew Puzder CEO of CKE Restaurants, Inc. (Carl’s Jr. and Hardees) Confirmation hearings delayed – lots of push back

Andrew Puzder (cont.) Senators Warren and Murray held forum to hear from his workers Working off the clock without pay Restrictions on full-time workers to avoid benefits Lack of sick leave Recent report by ROC United – pro worker group –sex harassment – sick workers serving food Opposite findings by Employment Policies Institute – conservative group

Andrew Puzder (cont.) As CEO, long record of his position (as private citizen) Critic of over government regulation Opposition to federal minimum wage increase Opposition to DOL expansion of overtime protection ($47,476) Need to balance regulations with need for economic growth Critic of Obamacare – leads to automation

Andrew Puzder (cont.) Expect Puzder will be advancing an agenda that looks very different than what we saw under President Obama Pro business Unions more closely scrutinized Less worker friendly

Confirmation Process Already been asked for Contracts with franchisees Employee pay and benefit data Employee handbooks Expect strong continued opposition Rumor he may pull out If he stays, history indicates he will most likely be confirmed

Executive Orders Has ability to rescind with stroke of a pen. History of Presidents doing so. Ability to issue new Executive Orders – but will he?

Predictions of What We Might See EEO-1 Regulations (new pay data reporting requirement) Viewed as highly burdensome without providing any meaningful information Fair Pay v. Safe Workplaces Rule (requirement of federal contract bidders to disclose violations of federal labor laws and provide wage statements and other information to employees) Part as been enjoined

Predictions of What We Might See (cont.) Federal Contractor Sick Leave (requires certain federal contractors to provide sick leave) Went into effect on 1/1/17 DACA – 2012 Executive Order allowed undocumented immigrants who entered US as children to receive temporary, renewable work permits NLRB – Currently has 3 members (2D, 1R) — Expect two Republican appointees in 2017 — Roll back of recent labor interpretations can be expected

Predictions of What We Might See (cont.) Supreme Court – Replace Scalia (appointed by Reagan) and may have other openings as Court is aging. Anthony Kennedy > 80 – appointed by Reagan Ruth Ginsburg > 80 – appointed by Clinton Stephen Breyer 78 – appointed by Clinton

Predictions of What We Might See (cont.) OFCCP final rule August 15, 2016 – Under Executive Order 11246 Sexual orientation and gender identity Protects against gender identity discrimination Addresses bathroom issue – use facility consistent with gender identifies with Sexual harassment includes gender identity

Predictions of What We Might See (cont.) E-Verify – required in all states? Tightening or elimination of some business immigration visas. TN – Trade NAFTA H-1B – Requiring testing of labor market H-2B – Temporary Workers Longer processing times

Predictions of What We Might See (cont.) Child Care – Paid Sick Leave Ivanka Trump’s proposal for 6 weeks paid maternity leave Tone at the Top Will influence agencies we deal with DOL EEOC DHS ICE

Proposition 206: Fair Wages and Healthy Families Act Passed by a wide margin (60%) Alters the landscape of pay and benefits available to Arizona employees. Hundreds of thousands of Arizona employees received a raise on January 1, 2017, and will receive further raises later. Private sector employees in Arizona, now have a right to paid sick leave beginning July 1, 2017.

Minimum Wage Under the Act, Arizona’s minimum wage of $8.05 per hour will increase annually as follows: $10.00 per hour on January 1, 2017. $10.50 per hour on January 1, 2018. $11.00 per hour on January 1, 2019. $12.00 per hour on January 1, 2020. Starting January 1, 2021, the minimum wage will increase annually based on cost of living, as measured by the consumer price index.

Minimum Wage: Tipped Employees Employees who receive tip income can continue to earn $3.00 per hour less than the minimum wage if their employer can prove the employee is earning at or more than the minimum wage when tips are counted.

Minimum Wage: Notice and Recordkeeping The Act imposes new notice and recordkeeping requirements Employers must post a notice of employees’ rights under the Act and keep payroll records for four years. A model notice compliant with the Act has been issued by the Industrial Commission of Arizona.

Local Regulation of Minimum Wage Local ordinances may provide a higher minimum wage, an outcome which has already come to fruition Flagstaff voters approved Proposition 414, which raises the minimum wage in Flagstaff to $12.00 per hour starting in July 2017, and which will increase to $15.00 by 2021. The minimum wage in Flagstaff would increase by the cost of living, and remain at “not less than” the prescribed levels or $2.00 above Arizona’s minimum wage.

Paid Sick Leave - Accrual Beginning July 1, 2017, Arizona employers must provide paid sick leave Employers with fewer than 15 employees – one hour of paid sick leave for every 30 hours worked, up to 24 hours a year. Employers with 15 or more employees – one hour of paid sick leave for every 30 hours worked, up to 40 hours a year. Exempt employees are assumed to work 40 hours per week for purposes of paid sick leave accrual (unless their normal work week is less than 40 hours).

Paid Sick Leave – Reasons for Leave Reasons employees may use paid sick leave Employee’s own physical or mental illness Care for the employee’s family member who has a physical or mental illness Public health emergency To ameliorate the effects of domestic violence, sexual violence, or stalking of the employee or employee’s family member Other circumstances

Paid Sick Leave – Notices and Paychecks Employers must post a notice in the workplace that outlines employees’ right to paid sick leave and their protections under the Act. Employers must itemize on employees’ paychecks the amount of paid sick leave available to the employee, the amount of sick leave taken by the employee in the year to date, and the amount of pay the employee has received as paid sick time, if any.

Paid Sick Leave – Carry over Employees may carry over earned sick leave to the following year, subject to the limitations on usage in that following year. Employers can avoid the rollover, but only if the employer pays out the earned sick leave at the end of the year and grants the full allotment of sick leave for the following year.

Paid Sick Leave - Documentation There are numerous types of documentation that may be acceptable from employees to demonstrate they are entitled to paid sick leave. For example: A doctor’s note A signed statement from the employee, or A protective order Employers cannot require that employees disclose the details about the health condition of the employee or family member, or the details of the domestic violence, sexual violence, abuse or stalking.

Paid Sick Leave - Increments Employers must permit employees to use paid sick leave in the smaller of (1) hourly increments; or (2) the smallest increment that their payroll system uses to account for absences or other time.

Paid Sick Leave – Replacement Employees Employers cannot require employees, as a condition of using paid sick leave, to find a replacement worker.

Paid Sick Leave – Misc. Protections Employers cannot count the use of paid sick leave as an absence that leads to discipline or termination. Employers cannot retaliate against employees for using or seeking to use paid sick leave.

Paid Sick Leave – Pay out upon termination or rehire Employers do not need to pay out the paid sick leave upon termination of employment, but if the same employee is rehired within nine months of termination, the accrued, unused sick leave needs to be reinstated and the employee can use that balance immediately upon rehire.

Questions?