UPDATE: Austin Paid Sick Leave Ordinance Legal Battle and Preparing for the October 1, 2018 Effective Date

The Austin City Council’s paid sick leave ordinance is facing legal challenge ahead of its October 1, 2018 effective date. As cities like San Antonio and Dallas consider similar ordinances, all eyes are on the legal battle surrounding Austin’s ordinance. Lloyd Gosselink’s Employment Law Practice Group sent a summary of the ordinance in February. Follow this link to see the full letter.

To recap, on February 16, 2018, the Austin City Council enacted a paid sick leave ordinance that requires private sector employers to provide paid sick leave to their full and part-time employees who work at least 80 hours a year within the City of Austin. The ordinance applies to any employee working in Austin, without regard to whether the employer is headquartered or maintains offices within the City.

The ordinance allows eligible employees to accrue one hour of paid sick leave for every 30 hours they work. An employee can accrue paid sick leave up to 64 hours (8 days) per year if they work for an employer with more than 15 employees, or up to 48 hours (6 days) per year if they work for an employer with 15 or fewer employees. Employers must carry over into the next year employees’ accrued, unused leave, up to the applicable cap, and must allow use of accrued leave upon timely request or when the need for leave is unforeseeable.

The sick leave may be used for the employee’s own or a family member’s physical or mental illness or injury, and preventative health care; or to seek medical attention, relocation, or participate in a legal action related to victimization from domestic abuse, sexual assault, or stalking. A family member includes a spouse, child, parent, or other individual whose close association with the employee is the equivalent of a family relationship.

The ordinance goes into effect on October 1, 2018 and the City’s Equal Employment Opportunity/Fair Housing Office (EEO/FHO) will begin assessing civil penalties on May 1, 2019 for any employer who fails to voluntarily comply with the ordinance. Small employers, those with five or fewer employees at any time in the preceding 12 months, excluding family members, have until 2020 to comply with the ordinance.

On April 24, 2018, the Texas Public Policy Foundation on behalf of several plaintiffs including the Texas Association of Business, the National Federation of Independent Businesses, and the American Staffing Association filed a lawsuit in Travis County District Court, challenging the ordinance, arguing that the ordinance is preempted by the Texas Minimum Wage Act and the Fair Labor Standards Act and violates their rights under the Texas Constitution. In June, the Court denied Plaintiffs’ request to delay the enforcement of the ordinance until the conclusion of the case, allowing the ordinance to apply to employers starting October 1, 2018.

On July 5, 2018, the plaintiffs filed a Notice of Appeal of the injunction denial to the Third Court of Appeals in Austin. The plaintiffs filed their briefs in support of the appeal on August 6, 2018 and the City will file a response brief. Currently, no hearing date has been set for the appeal.

The fate of Austin’s paid sick leave ordinance is unclear. The appeals court could reverse the district court and grant the temporary injunction, thereby preventing the City from enforcing the ordinance in October. Additionally, members of the Texas Legislature have expressed a willingness to overturn the ordinance if it is still is in effect when the Legislature reconvenes in January 2019.

Irrespective of the longevity of the ordinance, the October 1, 2018 deadline is quickly approaching. Employers need to decide whether they will change their sick leave/paid time off policies to meet the new requirements. Additionally, the ordinance requires that employers provide, at least monthly, a report to each eligible employee of their accrued, unused paid sick leave. Employers are also expected to provide a notice in the employee handbook of employees’ rights and remedies under the ordinance and post any signage provided by the City conspicuously in their office.

For the full text of the ordinance, click here.

If you have any questions related to preparing for the ordinance or other employment law matters, contact Sheila Gladstone (512-322-5863; sgladstone@lglawfirm.com), Ashley Thomas (512-322-5881; athomas@lglawfirm.com), or Emily Linn (512-322-5889; elinn@lglawfirm.com) of Lloyd Gosselink’s Employment Law Practice Group.