At approximately 1:00 a.m. CST on February 16, 2018, the Austin, Texas City Council approved an ordinance establishing a paid sick leave requirement that will apply to all private employers located within the City. If the mayor signs the ordinance as expected, Austin will join the growing list of cities and states obligating employers to grant paid sick time to workers.

The final text of the ordinance will not be available for several days, as the City Clerk must verify the approved language. Once the finalized ordinance is posted, we will address its requirements in greater detail. For now, this article highlights the key components of the law, based on our current understanding of what transpired at last night’s Council meeting.1

Coverage. The ordinance affects all private employers, regardless of size. Employees are covered by the ordinance if they perform at least 80 hours of work for pay annually within the City of Austin.

Accrual, Caps, and Carry-Over. Based on our knowledge to date, employees are entitled to earn 1 hour of sick time for every 30 hours worked in the City. Sick time will begin accruing when employment commences or when the ordinance takes effect, whichever is later.

The ordinance provides for caps on an employee’s accrual of leave time, based on the employer’s size. For “medium or large employers” (i.e., those with more than 15 employees), accrual maxes out at 64 hours of leave time per year. For smaller employers, employees can accrue no more than 48 hours per year. All available and earned time, up to the applicable cap, must carry over into the next year.

Permissible Uses. Leave may be taken for the employee’s own care or to care for the needs of a family member, which is defined to include spouses, parents, and children, as well as any other blood relative, along with anyone “whose close association with the employee is the equivalent of a family relationship.”

Compensation. Employees using their accrued sick time would be paid whatever compensation they would have earned if they had worked their scheduled hours “exclusive of any overtime premium, tips, or commissions, but no less than the state minimum wage.”

Additional Provisions. As presented to the Council, the ordinance also imposes notice, posting, and record-keeping requirements.

Employers are free to “adopt reasonable verification procedures” to confirm that an employee’s absence falls under one of the permissible uses, if leave would be taken for more than 3 consecutive work days. Employers may not, however, require employees to find replacements in order to exercise their right to sick time. Retaliation is also prohibited.

Enforcement and Penalties. The City of Austin’s Equal Employment Opportunity/Fair Housing Office (EEO/FHO) will be responsible for enforcing the new law. The ordinance requires the EEO/FHO to adopt interpretive regulations as needed, educate the public, and seek voluntary compliance prior to collecting civil penalties. If voluntary compliance is not forthcoming, the EEO/FHO may assess a civil penalty of $500 for each violation.

The EEO/FHO may issue only citation notices for leave time violations occurring after the effective date through May 1, 2019, at which time the full penalty provisions presumably kick in. Penalties for retaliation may be assessed once the law becomes operative.

Looking Ahead. The new law will take effect, in large part, on October 1, 2018. It does not cover employers with five or fewer employees until October 1, 2020.

There are already rumblings that the Texas Legislature will take steps to curtail the Austin ordinance in its next session. The Legislature is more conservative than the Austin City Council and is likely to pursue legislation to preempt and undo the Austin ordinance.2 For now, employers operating in Austin should expect to prepare for compliance with the ordinance and stay tuned for further developments.