Seyfarth Synopsis: Catching the paid sick leave bug, on February 16, 2018, Austin became the first Texas city – and the first Southern jurisdiction – to pass a mandatory paid sick leave ordinance, which will take effect on October 1, 2018 for most employers.

On February 16, 2018, Austin became the first city in Texas – and the first Southern jurisdiction – to enact a mandatory sick leave law (the “Ordinance”). The new Ordinance, which received an overwhelming 9-2 vote, will apply to all private employers. Over 200 residents testified at last week’s City Council meeting, the majority expressing support for the legislation. The Ordinance will go into effect on October 1, 2018 for larger businesses, though all employers will eventually be required to comply. As discussed in greater detail below, the main requirements of the ordinance are as follows:

  • Employees who perform 80 hours of work in Austin during a calendar year are eligible for paid sick leave (“PSL”).
  • Employees earn one hour of PSL for every 30 hours worked, up to the applicable maximum accrual cap.
  • Employees working for “medium to large employers” – those who have more than 15 employees – can accrue up to 64 hours (eight days) of PSL. Employees working for “small employers” – with 15 or fewer employees – can accrue up to 48 hours (six days) of PSL.
  • The Ordinance allows employees to use PSL to care for covered family members’ physical or mental health conditions, as well as their own, and for covered purposes relating to domestic abuse or sexual assault.

For businesses employing five employees or less, the Ordinance will not take effect until October 1, 2020. After the Ordinance’s passage, members of the Texas State Legislature promised to introduce bills in the next legislative session that would preclude municipalities from enacting paid sick leave laws. However, it is unclear how quickly the Texas State Legislature will act.

Which Employers Are Covered Under the Ordinance?

All private employers are covered.

Which Employees Are Covered By the Ordinance?

An employee who works at least 80 hours in Austin during a calendar year. It includes work performed through a temporary or employment agency, but expressly excludes independent contractors and unpaid interns from coverage.

How Much Sick Time Can Employees Accrue, Use and Carryover?

Employees will begin accruing PSL on October 1, 2018 or their commencement of employment, whichever is later. Employees can generally begin using PSL as soon as it is accrued. However, employers can restrict the use of PSL during the first 60 days of employment if the employee has a term of employment for at least one year.

All sick time will accrue in hour-unit increments. As noted above, employers with more than 15 employees must allow employees to accrue one hour of PSL for every 30 hours worked up to a maximum of 64 hours. Employees of smaller employers (15 or fewer employees) will accrue PSL at the same rate, but up to a maximum of 48 hours. Employers do not need to provide more than the applicable yearly cap of PSL to an employee.

Employers can put certain usage restrictions on the use of PSL, though the Ordinance does not set a minimum increment of use. The Ordinance states that employers are not required to allow the use of PSL on “more than 8 calendar days in a given calendar year.” Thus, for example, it would not allow employees to use their PSL allotment exclusively in “half-day,” four-hour increments (which would, for larger employers, result in 16 calendar days of use). The Ordinance does not otherwise address limitations on use of PSL.

Employees can carry over all earned and unused PSL into the following year. However, for employers who decide to lump sum grant the maximum amount of PSL at the beginning of a year, carry over is not required.

Under What Circumstances May Employees Use Sick Leave?

An employee may use PSL earned under the Ordinance for any of the following reasons:

  • The employee’s or family member’s physical or mental illness, injury or health condition, preventative medical or health care;
  • The employee’s need to seek medical attention, seek relocation or obtain services of a victim services organization.
  • Time off needed for an employee to participate in legal or court ordered action related to an incident of victimization from domestic abuse, sexual assault, or stalking involving the employee or employee’s family member.

The Ordinance defines “family member” to include an employee’s spouse, child, parent, or any other individual related by blood or “whose close association with the employee is the equivalent of a family relationship.”

What Notice Must Employees Provide When Using Sick Leave?

The Ordinance states that employers must provide earned PSL to an employee upon his or her request if that request is timely made “before their scheduled work time.” It does not provide any detail regarding the manner of such request. Employers cannot prevent the use of PSL for an unforeseeable qualified absence.

Can Employers Require Employees to Provide Medical or Other Documentation?

For leave requests of more than three consecutive work days, employers can adopt “reasonable verification procedures” to establish an employee’s qualification for PSL.

What Notice Must Employers Provide?

Employers with employee handbooks or policy manuals must include notice of employees’ rights and remedies under the Ordinance. In addition, employers must post signs describing the Ordinance requirements in at least English and Spanish in a conspicuous place where notices to employees are customarily posted.

On a monthly basis, employers are required to provide a statement (electronically or in writing) to each covered employee showing the amount of PSL accrued.

Must Unused Sick Time Be Paid Upon Employment Separation?

The Ordinance is silent as to payment of PSL upon termination. Texas law does not require payment of any accrued and used sick time upon separation, absent an agreement stating otherwise.

What Records Must Employers Maintain?

The Ordinance requires employers maintain records, in accordance with federal statutes, establishing the amount of earned sick time accrued and used by each covered employee. It does not, however, create a new requirement for certified payroll.

Anti-Retaliation

The Ordinance prohibits employers from transferring, demoting, discharging, suspending, reducing hours, or threatening any employee for requesting or using PSL, or for reporting any violations of the Ordinance.

What Employers Should Do

Employers with employees working in Austin should begin taking steps now to ensure their policies are in compliance with the Ordinance before the October 1, 2018 effective date. Things to consider include:

  • Reviewing existing sick leave policies and either implement new policies or revise existing policies to satisfy the Ordinance.
  • Reviewing policies on attendance, anti-retaliation, conduct, and discipline for compliance with the Ordinance.
  • Monitor the Austin City Council website for information on the Ordinance, including any proposed and final regulations.
  • Train supervisory and managerial employees, as well as HR, on the new requirements.