Executive Summary: The city of Austin, Texas has become the first Southern city to require virtually all private employers to offer paid sick leave to employees working within Austin’s city limits. This new ordinance goes into effect October 1, 2018, for employers with more than five employees. It goes into effect for employers five or fewer employees (not including family members) on October 1, 2020.

A few highlights from the ordinance:

  • Employees accrue paid sick leave at a rate of one hour for every 30 hours worked in the city of Austin, which an employee can begin using as soon as it is accrued.
  • Sick leave may be used for the employee’s own illness or preventative care as well as the care of a family member. Certain domestic violence situations are also covered.
  • Independent contractors are excluded from the ordinance; temporary employees are included, provided they work at least 80 hours for the employer in the calendar year.
  • Sick time pay does not include overtime premiums, tips or commissions. However, employees must be paid at least the state minimum wage.
  • Employers may restrict use of sick leave (not accrual) during the first 60 days of employment; however, for this to apply, an employer must establish that the employee’s term of employment is at least a year. Since most employees in Texas are employed “at will,” with no term of employment, this may be difficult for employers to prove.
  • Employees must make a timely request for use of earned sick time before the employee’s scheduled shift.
  • A yearly cap is allowed, which varies depending on the size of the employer. For employers with 15 employees or fewer (not including family members) the cap is 48 hours. For employers with more than 15 employees, the yearly cap is 64 hours.
  • Employers who have an employee handbook must include a notice of employee rights and remedies under this ordinance in their handbook. Employers must also notify each employee at least monthly with a statement of available sick time.
  • Under the ordinance, a posting will be required once one is created and approved.
  • Nothing in the ordinance prohibits employers from having a more comprehensive policy, provided the accrual, purpose and usage requirements of the ordinance are met.

Employers' Bottom Line: This marks a distinct departure from Texas law, which generally does not require employers to provide any specific leave time for employees. This ordinance reflects a growing trend in the number of municipalities legislating mandatory leave time. We expect this ordinance to be challenged in court and/or the legislature, but for now, employers with Austin employees should start looking at their current policies to see how this ordinance may affect their workforce.