United States: Texas Legislature And Courts Clash With Cities Over Mandatory Sick Leave: What Employers Need To Know

Dallas has become the third city in Texas, following Austin and San Antonio, to pass a city ordinance requiring private-sector employers to offer paid sick leave to their employees. The ordinances have yet to be implemented in any of these cities. However, with the effective date of Dallas' and San Antonio's ordinances looming (and with Austin's ordinance hanging in the balance of legal challenges), it is time for employers to take a hard look at the new requirements that may be imposed on them.

The three local Texas ordinances are substantially the same. An overview of the key provisions of each ordinance follows:

  • Eligible employees: Individuals who perform at least 80 hours of work for pay within the respective city (Austin, San Antonio or Dallas) in a calendar year for any given employer; independent contractors and unpaid interns are excluded.
  • Leave accrual: Employers must provide eligible employees with one hour of paid sick time for every 30 hours worked, beginning on the later of the employee's start date or the applicable effective date of the ordinance.
  • Annual caps: Annual caps on the amount of paid sick time eligible employees can accrue is based on the size of the employer:
    • More than 15 employees: 64 hours per year.
    • Fewer than 15 employees: 48 hours per year.
  • Carryover: Employers must allow unused accrued sick time to carry over to the next year, except that:
    • Hours to be carried over are subject to the annual cap.
    • If an employer makes the yearly cap of accrued paid sick time available to an employee at the beginning of the year, the employee is not entitled to carry over his or her accrued time to a subsequent year.
  • Usage: Eligible employees are permitted to use paid sick time once it is accrued, except that an employer can impose certain restrictions on usage:
    • During the employee's first 60 days of employment if the term of employment is at least one year.
    • An employer may limit an employee's sick time usage to no more than eight days in a year.
  • Permitted uses:
    • Care or treatment of a mental or physical illness, injury, or health condition, including preventive medical or health care, for an employee or the employee's family member.
    • Medical attention, relocation, seeking or using services of a victim services organization, or participating in legal proceedings related to domestic abuse, sexual assault, or stalking of the employee or the employee's family member.
  • Penalties: Up to $500 per violation if there is no voluntary compliance within 10 business days of receiving written notice of the violation.

At present, there is no federal law requiring paid sick leave, and Texas remains in the majority of states that have not enacted statewide paid sick leave laws.

Austin, Tex. Ordinance No. 20180215-049; San Antonio, Tex. Ordinance No. 2018-08-16-0620; Dallas, Tex. Ordinance No. 19-479.

The Legal Challenges Have Stalled

Shortly after Austin's ordinance was passed, a variety of businesses and business organizations filed a lawsuit challenging its validity and seeking a preliminary injunction to stop the ordinance from going into effect. The District Court denied the preliminary injunction; however, the Texas Court of Appeals for the Third District overturned the denial and found the ordinance unconstitutional as a matter of law. The city of Austin has petitioned for review by the Texas Supreme Court, and no decision is likely to be issued for some time.

Although only Austin's ordinance is at issue in the present litigation, the Texas Supreme Court's decision is sure to impact the validity of all three city ordinances given the similarities among them.

The Texas Legislature Has Stalled

The Texas Legislature was expected to unequivocally preempt the local ordinances by statute in its most recent session, but the legislative session ended before the bill could come to a final vote. It is highly unlikely that the Texas Legislature will have a vote again on the issue until 2021 at the earliest – long after the ordinances are set to go into effect.

So What Should Employers Do?

Dallas' and San Antonio's ordinances are scheduled to take effect beginning Aug. 1 for employers with more than five employees, while the implementation of Austin's ordinance is uncertain. Despite doubts about the long-term viability of such ordinances, employers should at least begin the process of reevaluating their policies to ensure compliance with applicable regulations if they go into effect. Suggested steps include reviewing the applicable ordinances; ensuring that the sick leave policies, human resources policies and employee handbooks are in compliance with the applicable ordinances, and revising such policies if necessary; and training employees responsible for enforcing the employer's sick leave policies to ensure compliance if the ordinances go into effect.

Due to the vulnerabilities of the Texas city ordinances, employers are advised to continue monitoring judicial and legislative happenings related to sick leave requirements with the assistance of counsel. If you would like assistance reviewing your company's sick leave policy or have additional questions about the current state of the law, our Texas Labor and Employment Group is available to help.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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