Earlier this year, Austin became the first city in Texas to pass an ordinance mandating paid sick leave. The Austin paid sick leave law is set to go into effect on October 1, 2018, but faces stiff opposition from state lawmakers, business groups and some employers, many of whom began voicing their intentions to overturn it in the next legislative session almost immediately after the law it passed.
Just last week, a number of business groups and staffing agencies made good on those promises by suing the City of Austin to prevent the paid leave ordinance from going into effect as scheduled in October, arguing that the law goes against the Texas constitution.
The specifics of the ordinance are included below. But Austin isn’t the only city in the Lone Star State where a paid sick leave law is making headlines.
While Austin is the first city in Texas to pass a law requiring employers to provide paid sick leave (indeed, in the entire southern United States), it is indicative of a broader movement that might have implications for the rest of the state. (Just last week, a coalition of workers’ rights groups began the process of petitioning the Dallas City Council to put a paid sick leave measure on the ballot for the next municipal election, and a nonprofit in San Antonio launched a similar petition drive in March.)
Even if efforts to get paid sick leave laws on the ballot elsewhere in the state fail, Texas employers have another reason to pay close attention to how the battle over the Austin paid sick leave law plays out: The law covers any eligible employee working within Austin’s city limits, regardless of where the employer is headquartered, its size or how many employees it has. This means that, if the law is upheld, employers outside the city limits that have employees performing work inside Austin’s city limits may be required to comply with the law’s provisions.
Businesses that have employees performing work in the Austin area (including remote employees) may want to go ahead and begin the process of reviewing their HR policies and/or employee handbooks now so they are prepared if the Austin paid sick leave law takes effect as scheduled on October 1.
If you’ve ever felt like you’re in over your head when it comes to managing labor and employment law compliance for your company or employer, a comprehensive human resources outsourcing provider like G&A Partners can help. G&A Partners’ experts can provide valuable assistance when it comes to HR compliance, including helping you determine if a law applies to your company, providing guidance on how to ensure your policies are compliant with the rule’s regulations, and implementing any HR technology systems you might need to track and manage employee information.
Who is covered by the new law?
According to the Austin paid sick leave ordinance, an eligible employee is defined as “an individual who performs at least 80 hours of work for pay within the City of Austin in a calendar year for an employer, including work performed through the services of a temporary or employment agency.” The ordinance further specifies that this law does not apply to individuals who are unpaid interns or independent contractors according to Title 40, Section 821.5 of the Texas Administrative Code.
What exactly does the law require?
Eligible employees must be allowed to accrue one hour of paid sick time for every 30 hours worked for the employer in the City of Austin, starting the first day of employment or the day the ordinance goes into effect (whichever comes first). The ordinance further stipulates that earned sick time should be granted in one-hour increments, not in increments of a fraction of an hour.
The amount of sick leave employers are required to provide is capped based on how many employees the company had in the preceding 12 months:
*The law delays the implementation of the paid sick leave requirements for micro-businesses (those with 5 or fewer employers) until October 1, 2020.
In addition, the law requires employers to track and keep records of the amount of sick leave each eligible employee accrues and to provide those employees with information about how much leave they have accrued on a monthly basis, at a minimum. Employers are also required to include language about the ordinance’s requirements in their employee handbooks/other sick leave policies as soon as the law goes into effect and conspicuously post information about the ordinance at their worksites once the city finalizes the required posting language.
What penalties do employers who fail to comply with the ordinance face?
Austin’s Equal Employment Opportunity Opportunity and Fair Housing Office (EEO/FHO) is charged with enforcing the law and has the ability to assess civil penalties of up to $500 per violation.
This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.