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Small employers (those with five or fewer employees at any time
in the preceding 12 months, excluding family members)
have until 2020 to comply.

On February 16, 2018, the Austin City Council approved a paid sick leave ordinance requiring all private employers to provide paid sick leave to their full and part-time employees located in Austin. Under the ordinance, employees are eligible to accrue paid sick leave if they perform at least 80 hours of paid work in Austin in a calendar year for an “employer,” which is defined as any person or organization other than governmental employers. In addition to requiring employers to provide paid sick leave to employees working only 80 hours per year, the ordinance, if not blocked through legal or legislative means, will expand sick leave use to care for family members and to deal with family violence, restrict when employers may require doctors’ notes, and impose posting requirements. Austin employers’ current sick leave policies will require significant revision.

The ordinance allows eligible employees to accrue one hour of paid sick leave for every 30 hours they work. 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 related by blood or whose close association with the employee is the equivalent of a family relationship.

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 if the employee has made a timely request to use the leave before their scheduled work time, unless the need for leave is unforeseeable. An employer may adopt “reasonable verification procedures” to establish that an employee’s request for sick leave is for a permitted use, but only if the request is for more than three consecutive work days.

Employers must compensate employees using sick leave the same as if the employee had worked the scheduled time, less any overtime premiums, tips, or commissions, but no less than the minimum wage. In addition, employers must provide, on at least a monthly basis, a report to each eligible employee of their accrued, unused paid sick leave; add a notice in the employee handbook of employees’ rights and remedies under the ordinance; and post signage of the ordinance.

The City’s Equal Employment Opportunity/Fair Housing Office (EEO/FHO) is tasked with educating employers and employees about the ordinance, receiving and investigating complaints, enforcement, and adopting rules to implement the ordinance. Upon a finding of a violation, the EEO/FHO will seek voluntary compliance, but if voluntary compliance cannot be achieved, starting on May 1, 2019, may assess a civil penalty of up to $500 against the employer for each violation occurring after October 1, 2018. The ordinance prohibits retaliation against an employee for requesting or using paid sick leave, reporting a violation of the ordinance, or participating in an administrative proceeding to enforce the ordinance. Penalties associated with such retaliation can be assessed starting October 1,2018.

Austin is the first Texas city to require paid sick leave, though it joins several other cities across the nation with such an ordinance. It is possible the ordinance will be short-lived or delayed, as business groups and trade associations in other cities have challenged paid sick leave ordinances through lawsuits on grounds that such an ordinance exceeds the city’s home rule powers and territorial jurisdiction. The ordinance could also be challenged legislatively—State Representative Paul Workman of Austin has promised to seek passage of a law to overturn the ordinance “on the first day possible” when the Legislature reconvenes in January 2019. If the ordinance is overturned, it would not be the first instance in recent years—lawmakers overturned Austin’s ride-sharing ordinance in 2017.

Disclaimer: This announcement is being made based on our understanding of the final language from the latest draft of the ordinance (available at this link), and based on the council meeting transcript, as the ordinance text is being finalized by the City Clerk’s office and has not yet been released. Once the Mayor signs the final ordinance, and closer to the effective date, we will send out an updated, more detailed announcement summarizing employers’ obligations under the new ordinance.

If you have any questions related to this announcement or other employment law matters, contact Sheila Gladstone, Chair of Lloyd Gosselink’s Employment Law Practice Group (ELPG), at 512-322-5863 or sgladstone@lglawfirm.com, or Ashley Thomas, Associate in the ELPG, at 512-322-5881 or athomas@lglawfirm.com.
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