Austin’s New Paid Sick Leave

It has not been fully tested in court (the lawsuit and appeal filed by certain business groups are still pending), nor has the Austin city government released any “how-to” manuals for affected employers…

by William T. Simmons

This story has been edited with a correction and we regret our errors and any confusion or misunderstanding it may have caused.

On February 16, 2018, Austin, Texas adopted Ordinance No. 20180215-049 and became the first Texas city to require employers with employees working in the city to provide paid sick leave to those employees. Coverage is slated to begin October 1, 2018 for employers with six (6) or more employees, and on October 1, 2020 for employers with five (5) or fewer employees.

City of Austin spokesperson: “Following the Court of Appeals order in August imposing a stay on implementation of our earned sick time ordinance, we have postponed our education and outreach efforts for now. At the time of the Court of Appeals order last month, the City had completed much of its rulemaking process related to the earned sick ordinance, including public comment responses. The City is ready to immediately continue with outreach and enforcement efforts when the stay is lifted.”

The ordinance is so new that it has not been fully tested in court (the lawsuit and appeal filed by certain business groups are still pending), nor has the Austin city government released any “how-to” manuals for affected employers. However, certain things seem clear, as outlined below.

According to a City of Austin spokesperson: “Following the Court of Appeals order in August imposing a stay on implementation of our earned sick time ordinance, we have postponed our education and outreach efforts for now. At the time of the Court of Appeals order last month, the City had completed much of its rulemaking process related to the earned sick ordinance, including public comment responses. The City is ready to immediately continue with outreach and enforcement efforts when the stay is lifted.”

The new ordinance will require most companies with workers in Austin (16 or more employees) to provide up to 64 hours, or 8 days, of paid sick leave each year. The leave will be accrued at a rate of one hour for every 30 hours an employee works. Companies with only 15 or fewer employees only have to provide 75% of that total time each year, i.e., 48 hours of paid sick leave, which equals six paid sick leave days.

There are no exemptions for part-time workers. Employers would not be able to ask for medical documentation unless the absence is for four days or longer.

Thus, it could be possible for employees to take paid sick leave for undocumented absences of three days or less at a time, and the employer would have to take the employee’s word for it that the reason for the absence qualifies for the payment of sick leave.

Although the lawsuit and appeal are still pending, as noted earlier, there appears to be nothing in the ordinance that would prevent an employer from imposing appropriate disciplinary action if it has clear proof that an employee has actually falsified a report of an otherwise qualifying sick leave absence.

Of course, the burden would be on the employer to prove such a thing. The paid leave would be available not only for the employee’s own medical issues, but also for dealing with the medical issues of the employee’s family members, or with related problems such as domestic violence affecting the employee or a family member.

Regarding what family members are covered, the Austin ordinance’s definition is quite broad, including anyone related to the employee by blood, which could include not only immediate family members, but also grandparents, grandchildren, aunts, uncles, great-aunts, great-uncles, nephews, nieces, cousins to the n-th degree, great-nephews, great-nieces, great-grandparents, great-grandchildren, and relatives with even more distant relationships.

Aside from blood relatives, “family member” can include people unrelated by blood or marriage, as long as the employee can show some kind of close family-like connection to the individual.

Concerning proration, the only proration is what is provided in Section §4-19-2(A), which provides that “[a]n employer shall grant an employee one hour of earned sick time for every 30 hours worked for the employer in the City of Austin. Earned sick time shall accrue only in hour-unit increments. There shall be no accrual of a fraction of an hour of earned sick time.”

The accrual of paid sick leave begins immediately after the employee begins employment. If the employee’s “term of employment” is at least one year, the employer may restrict the employee from using any of the accrued sick leave during the first 60 days of employment. How the one-year “term of employment” will fit with the concept of employment at will is very unclear – that is one of the untested concepts in the ordinance that could lead to claims of violations.

Government agencies are not covered by the ordinance. Likewise, independent contractors and unpaid interns are not covered. Temporary employees from staffing firms would be covered by their staffing company employers, not by the client companies of the staffing firms.

The paid leave would be paid at the rate of pay that the employee would have earned if the time off had been worked, exclusive of overtime and tips. Employees who are paid solely with commissions and who do not earn a guaranteed hourly wage or salary must be paid at least the Texas minimum wage (currently, $7.25/hour) for each hour actually taken as paid leave.

Businesses with existing paid sick leave policies that provide at least the required amount of paid time off for sick leave do not have to add anything to their policies. The ordinance adds that employers may grant more paid sick leave than the ordinance requires.

The ordinance will not apply until October 1, 2018. There is a delayed coverage period for very small businesses with fewer than six (6) employees – such small employers will have until October 1, 2020 to begin paying sick leave benefits.

Like most laws meant to help employees, the ordinance prohibits any kind of retaliation against employees who use or attempt to use paid leave under the ordinance. Austin’s Equal Employment Opportunity / Fair Housing Office will handle any complaints of paid sick leave denials or retaliation.

There is a potential fine of $500 for a violation, but fines will not be imposed until June 1, 2019 or after, unless the violation involves retaliation, in which case the fines begin immediately starting October 1, 2018.

There are many other detailed provisions in the ordinance, but the above items summarize the most important points. Various news media and law firms have useful reports about the ordinance that can be found online.

Some state leaders have voiced their disagreement with the ordinance and have indicated that they may support legislation that would limit such ordinances in Austin and other cities that may be considering similar action, but since no such legislation could become effective earlier than the next time the Legislature meets (January – May 2019), Austin employers will need to be prepared to implement paid sick leave under the ordinance beginning October 1, 2018.