On February 15, 2018, Austin became the first city in Texas to adopt a mandatory paid sick leave ordinance (the “ordinance”).  To prepare for compliance, Texas employers with employees in Austin will want to review the ordinance’s requirements:

• Effective October 1, 2018, all private employers with 16 or more employees must provide 8 days of earned sick time (“EST”) to employees who work at least 80 hours per calendar year. Employers with 6-15 employees must provide 6 days of EST per year.

• Employees will accrue EST at a rate of one hour for every 30 hours worked, in one-hour increments, and will accrue EST at the commencement of employment, or the effective date of the ordinance, whichever is later.  

• Employees may use EST for their own, or a family member’s, physical or mental health or preventative care; or for medical attention, services, or legal actions as a result of domestic abuse, sexual assault or stalking.

• Employees may carry over accrued but unused EST, up to the maximum yearly cap, unless the employer grants the employee at least the minimum required amount of EST at the beginning of each year.

• Employers must: (i) provide monthly statements regarding an employee’s accrued EST; (ii) post a notice of the ordinance; and (iii) include notice of the ordinance and its requirements in the employers’ handbooks. 

• The ordinance provides for a civil penalty of up to $500 for each violation.

• Effective October 1, 2020 employers with 5 or fewer employees must provide 6 days of EST each year.

What’s Next?

Local businesses currently oppose the ordinance.  On April 24, 2018 the Texas Public Policy Foundation filed suit in Travis County [Austin] on behalf of seven plaintiffs -- including the Texas Association of Business, National Federation of Independent Business, and the American Staffing Association -- challenging the ordinance as preempted by state minimum wage law and as violative of the Texas Constitution.

In addition, the Workflex in the 21st Century Act (the “Act”), currently pending before the U.S. Congress, could neutralize the Austin ordinance and the growing number of county and city ordinances across the country regarding mandatory paid sick leave. Under the Act, employers that allow for paid time off and offer their employees options for flexible work arrangements would qualify for ERISA coverage and, thus, would likely pre-empt state and local paid leave and workflex laws.