Austin Becomes First City in the South to Require Paid Sick Leave

February 27, 2018

On Feb. 16th, the Austin City Council voted 9-2 to pass an ordinance making paid sick leave available to employees of all private employers in Austin, Texas. The ordinance, which takes effect Oct. 1, 2018, for businesses with more than five employees (and on Oct. 1, 2020 for all other employers), makes Austin the first city in Texas — and the first city in the South — to join the recent wave of cities, counties and states mandating paid sick leave for employees within their borders.

While the final version of the ordinance has not yet been posted and does not take effect for nearly eight months, companies with a presence in Austin (or companies with plans to open locations in or move their business to Austin) should begin preparing now to comply with its requirements:

  • Employers must grant each of their Austin employees (defined to include anyone who works for pay for at least 80 hours in a calendar year within the city) one hour of paid sick leave for every 30 hours worked. Such leave must be paid at the same rate of pay the employee would have earned had he/she been working those hours, exclusive of overtime, tips or commissions, and must be at least equal to the state’s minimum wage (which is keyed to the federal minimum wage of $7.25).
  • Employees begin earning paid sick leave on their first day of employment (or, for current employees, on Oct. 1, 2018), and may use their leave as soon as they accrue it.
  • Paid sick leave can be used for absences caused by the physical or mental illness or injury, health condition, or preventive healthcare of the employee or the employee’s family member (which includes the employee’s spouse, child, parent, any other blood relative and any person “whose close association with the employee is the equivalent of a family relationship”). Notably, the leave also may be used to seek medical treatment or attend court for matters related to domestic abuse, sexual assault or stalking involving the employee or his/her family member. 
  • Use of paid sick leave by an employee may be capped at 64 hours per year for employers with more than 15 employees, and at 48 hours per year for employers with 15 employees or fewer. Accrued but unused sick leave will carry over to the following year, subject to those caps. 
  • When an employee requests the use of paid sick leave lasting more than three consecutive workdays, an employer may adopt “reasonable verification procedures” (which the ordinance does not define) to ensure that the leave is being taken for one of the reasons permitted by the ordinance.
  • Employees who separate from employment but are rehired by the same employer within 12 months of that separation may use all paid sick leave accrued at the time of their departure.
  • Employers are prohibited from retaliating against employees based on their taking of, or requesting to take, paid sick leave, or for reporting violations or participating in investigations of such violations.

The ordinance also imposes additional administrative obligations upon Austin employers. Those include providing to each employee, on at least a monthly basis, a written statement showing the amount of paid sick leave the employee has accrued, and maintaining records of such notice consistent with 29 C.F.R. § 516(a) record-keeping requirements. Employers will also be required to post conspicuous signage in both English and Spanish, to be made available by the City of Austin, notifying employees of their rights under the ordinance.  Failure to comply with the above requirements carries a penalty of up to $500 for each violation.

Many employers already provide paid sick leave that meets or exceeds the ordinance’s requirements. Those employers will not be required to offer paid sick leave above and beyond what they already provide to their employees. However, all employers will be required to meet the posting and notification standards specified in the ordinance. All Austin employers should therefore review their policies and practices, and determine what, if any, changes may be needed to ensure full compliance. 

Employers would be wise to watch for possible efforts by the Texas Legislature to repeal the Austin ordinance when its next session begins in January 2019. Austin’s business community is split on the new ordinance. While the Austin Chamber of Commerce and Austin Independent Business Alliance have opposed it, many Austin businesses have been vocally supportive. But in the recent past, Texas has passed several other bills aimed at undoing local ordinances that provide protections greater than those afforded by state law.

For further information or questions about the information contained in this legal alert, please contact the author, your McGuireWoods contact or a member of the firm’s labor and employment team.