Early this morning the Austin City Council passed a long-discussed ordinance requiring employers to provide employees with paid sick and safe leave (“PSL”). Austin is the first city in the South ever to enact such a law.

Highlights of the New Austin Ordinance:

  • Effective October 1, 2018, employers must provide employees who work at least 80 hours in Austin in a calendar year to accrue PSL at the rate of one hour for every 30 hours worked, up to 64 hours annually (48 hours for employers with 15 or fewer employees).
  • PSL may be used for the employee’s or a family member’s illness, injury, health condition or preventive care, or as necessary to deal with domestic abuse, sexual assault or stalking involving the employee or a family member.
  • Unused sick time is carried over to the following year. However, an employer may cap annual PSL use (as opposed to accrual) at 8 days.
  • Employer handbooks must provide notice of these rights; posters to be issued by the City of Austin must be displayed.
  • Employers must provide a statement showing available PSL on at least a monthly basis.
  • An employer can create reasonable procedures to verify employees’ PSL requests. The ordinance specifically requires employees’ to timely request PSL “before their scheduled work time,” although employers may not prevent employees from using earned sick time for an “unforeseeable qualified absence.”
  • An employer may restrict an employee’s use of accrued PSL during an employee’s first 60 days of employment if the employer can establish “that the employee’s term of employment is at least one year.” How an employer can establish that, especially with respect to an at-will employee, is not addressed.
  • Employers may not condition the use of sick time on the employee finding a replacement for the time missed.
  • An employee transfer with the same employer does not impact the amount of earned sick time or the employee’s right to use it; if an employee returns to work for the same employer in a six month period, the employee may use previously earned sick time.
  • Employers may not retaliate against employees for requesting or using earned sick time, for reporting a violation, or for trying to exercise their rights to paid sick leave pursuant to the ordinance.
  • The ordinance will be enforced by the City of Austin Equal Employment Opportunity/Fair Housing Office. Implementing rules are expected to follow. A civil penalty of up to $500 applies for each violation.

Impact of Employer Size:

  • The effective date for most employers (with more than five employees) is October 1, 2018.
  • For employers with five or fewer employees, the law takes effect on October 1, 2020.
  • For employers with fifteen or fewer employees, the 64 hour required accrual is reduced to 48 hours annually.

What Employers Must Do:

As the October 1, 2018 effective date approaches, private employers with employees in Austin should review leave policies, procedures, payroll practices and notices to ensure compliance. Of note, although Austin is the first Southern city to pass a paid sick and safe leave law, it is part of the paid sick leave trend spreading from coast to coast.

State and local governments prefer to pass local leave laws in order to tailor to regional businesses and economies. And recently, the federal government has taken up the issue; Congress has introduced dueling bills from both sides of the aisle addressing paid sick leave, the Healthy Families Act and Workflex in the 21st Centuries Act (WFA). Meanwhile, employers with a national workforce face a variety of paid and unpaid leave laws, company-provided paid time off policies, and disability benefit obligations, which may or may not run concurrently and in some cases, contradict one another.

Paid sick leave laws are here to stay. Currently over 40 jurisdictions have passed such laws, and federal contractors are required to provide paid sick leave pursuant to the federal executive order 12988. Employers with a workforce in multiple jurisdictions must review and determine whether existing policies comply with the variety of paid leave laws. Such a review must include assessment of required record-keeping, handbook notice, and poster obligations as well as ensuring pay statement or other informational systems are in place to provide employees the required accrual and usage information.