Publication

September 13, 2018Client Alert

Austin Employers Escape Onerous Sick Leave Law

Five years ago, only a handful of sick leave laws were in effect. Today, there are nearly 50 state and local laws mandating sick leave for employees. A few weeks ago, Austin, Texas escaped joining the ranks of those communities where onerous sick leave laws are mandatory.

Background

If enacted, Austin’s sick time ordinance (Ordinance No. 20180215-049) would have granted covered employees one hour of earned sick time for every 30 hours worked. Employees would have been able to use their earned sick time for reasons such as their own, or a family member’s, physical or mental illness or injury, preventive care, or health condition. Paid time would have further extended to cover leave related to an incident of victimization from domestic abuse, sexual assault, or stalking. In most circumstances, employees working for a medium or large employer would have been eligible to accrue up to 64 hours of sick time per year, or 48 hours per year when working for a small employer. The ordinance called for damages of up to $500 for each violation.

In good news for employers, on August 17, 2018, the Texas Third Court of Appeals enjoined the City of Austin’s sick time ordinance, which was set to go into effect October 1, 2018. The parties submitted their briefs on the merits on September 6, 2018. In the briefs, each side spends a significant number of pages addressing procedural arguments, but the heart of the challenge concerns the definition of “wage.” If the court determines that “wage” encompasses benefits, such as sick time pay, then the Texas Minimum Wage Act preempts Austin’s sick leave ordinance, and therefore, makes it unlawful.

Concerns By Austin Business Community

The business community widely expressed concerns that the scope of the ordinance puts Austin businesses at a competitive disadvantage. Additionally, the ordinance would have been particularly onerous for small business owners. Paid time off allowances are an expensive employee benefit, and the increased costs may discourage employers from hiring new employees. In addition, the details of the ordinance were complicated and would have been difficult for employers to understand, especially so for small business owners, many of which do not have human resource departments to assist with compliance.

What Is Next

The City of Austin’s sick time ordinance demonstrates the growing trend of sick time ordinances among cities across the United States. Austin was the first city in Texas to pass such an ordinance, and San Antonio enacted a sick time ordinance of its own on August 16, 2018 (also likely to face challenges).

Paul Workman, a Republican Representative from Austin, has vowed to introduce a bill that will undo cities’ attempts to enact sick leave ordinances. Pre-filing begins this November, but the Texas legislature does not convene until January. Even with this delay, Representative Workman already purports to have co-sponsors and co-authors for the legislation.

Although the Texas legislature might enact Representative Workman’s upcoming bill, employers still should be aware of their local sick time ordinances and their legal consequences.

back to top