United States: Moving Targets: (Possible) Delays To Texas Paid Sick Leave Ordinances

Even though it is less than 10 days before paid sick and safe time (PSST) ordinances in Dallas and San Antonio are/were scheduled to take effect, developments regarding the status of these ordinances are changing daily. These fast-paced changes have rendered the laws moving targets, and have left businesses and others affected by the laws scrambling to keep up with their attendant legal obligations.

In this article, we provide an overview of the status of these PSST ordinances in each of the major Texas cities to have passed such laws: San Antonio, Dallas, and Austin.

San Antonio

San Antonio's PSST ordinance's effective date has been delayed until December 1, 2019, when it is expected to take effect for employers with six or more employees.

The ordinance was originally scheduled to take effect on August 1, 2019. However, on July 15, 2019, several business groups representing a variety of industries filed a lawsuit to challenge the City's authority to enact the ordinance. The Texas Attorney General eventually intervened in support of the challenger's position while an employee rights group (the Texas Organizing Project) intervened in support of the City's plan to move forward with the ordinance.

News broke late last week that, subject to court approval, the parties submitted a proposed order agreeing to delay the effective date of the ordinance until December 1, 2019. On July 24, 2019, the district court judge signed the order, staying the San Antonio PSST ordinance until December 1, 2019, and abating the lawsuit until San Antonio amends the ordinance or November 7, 2019, whichever occurs first.

In a subsequent press release, the City reported that the delayed implementation accomplishes the following:

  1. Delays implementation to a specific date, instead of potentially risking an indefinite injunction;
  2. Allows the San Antonio Paid Sick Leave Commission additional time to continue conferring with stakeholders and studying the ordinance; and
  3. Provides the Paid Sick Leave Commission and City Council the opportunity to recommend changes, amend the ordinance to address stakeholders' concerns, clarify points, fill in gaps in the ordinance, and strengthen the ability to withstand legal challenge.

In short, while the delay will provide additional time for affected businesses to have their concerns addressed before the ordinance goes into effect, proponents of the ordinance, including the City, are optimistic that the delay will ultimately result in a long-term victory by strengthening the ordinance to withstand the legal challenge.

Dallas

Dallas's PSST ordinance is still scheduled to go into effect on August 1, 2019, for employers with six or more employees, though reports of threatened litigation may lead to a delay.

Unlike the situation in San Antonio, no lawsuit has been filed to challenge Dallas's ordinance, and the Dallas Office of Equity & Human Rights—the agency charged with its enforcement—has publicly maintained the plan for an August 1 effective date. Indeed, within the last week, the agency has posted Final Rules and answers to certain Frequently Asked Questions on its website, all part of the planned rollout.

On the morning of Wednesday, July 24, however, reports surfaced that the Texas Public Policy Foundation might file a lawsuit to challenge the ordinance. Notably, the Texas Public Policy Foundation is one of the plaintiff-organizations that sued the City of Austin, successfully enjoining Austin's PSST ordinance (as detailed below).

It is possible that negotiations between the parties in the Dallas litigation could result in a voluntary delay of Dallas's PSST ordinance before August 1. Barring that outcome, and if a lawsuit is filed, there may still be time for a court to enjoin the lawsuit before August 1.

For now, however, the Dallas PSST ordinance is scheduled to take effect on August 1, for employers with six or more employees.

Austin

Austin's PSST ordinance was originally slated to take effect on October 1, 2018, for employers with six or more employees. Ongoing litigation, however, has resulted in a temporary injunction, which has prevented the ordinance from taking effect.

On April 24, 2018, a lawsuit was filed in state court to challenge the City's authority to enact the ordinance. The trial court initially denied the challengers' request for a preliminary injunction, but on August 17, 2018, the Texas Court of Appeals, Third District, granted the challengers' motion for emergency relief and enjoined the ordinance from taking effect. On November 16, 2018, the appeals court then held that the ordinance violated the Texas Constitution and was preempted by the Texas Minimum Wage Act, and instructed the trial court to issue an injunction for the remainder of the litigation. The case is now on appeal to the Texas Supreme Court, which has not yet determined whether it will hear the case. If the Texas Supreme court accepts the case, any action could determine the fate of all three Texas PSST ordinances.

For now, the Austin ordinance remains enjoined from taking effect.

What can employers do?

Employers that may be covered under any of the PSST ordinances for San Antonio, Dallas, or Austin should immediately consider their compliance needs. Those employers covered under the Dallas ordinance in particular should consider developing compliant leave policies and procedures before the August 1, 2019 effective date. For those employers that may be affected by the San Antonio or Austin ordinances, it would be wise to set reminders for check-ins with employment counsel to review the statuses of these ordinances, and to be prepared to roll out a compliant leave program if and when these ordinances take effect.

Regardless of the approach taken, employers with operations in any of these major cities in Texas are strongly encouraged to consult with knowledgeable employment counsel to help them consider options for their business.

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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