Although many employers voluntarily offer some form of paid sick leave as a benefit, there is no federal law that requires it unless the employer is a government contractor. Connecticut was the first state to require sick leave in 2011. Now, nine states and the District of Columbia require some form of paid sick leave, and various local governments have also thrown their regulatory hats into the mandatory sick leave ring. Currently, more than 40 state and local governments require some form of sick leave, and the list seems to be growing exponentially.
Until recently, state and local efforts to regulate sick leave were largely limited to “blue” states or cities on the West Coast, or in the Northeast and Upper Midwest. But with the passage of its sick leave ordinance last month, Austin, Texas, became the first city in a traditionally employer-friendly state to follow suit. Although the ordinance is limited to Austin and will not become effective until this October, it has already raised concerns for employers all across Texas, who see the ordinance as a potential “camel’s nose under the tent” that could result in a patchwork of local laws governing the employment relationship in a state now generally considered to be business-friendly due in part to its uniform and predicable state employment laws. The Austin sick leave ordinance does not provide employees with a private cause of action, but the breadth of the ordinance is noteworthy – for example, it applies to all private employers without exception, there is no minimum employee requirement (yes, even one employee counts), and it will eventually phase in mandatory posting requirements. A complete summary of the Austin ordinance is below.
Although the long-term sustainability of the Austin ordinance is in question and may ultimately be in the hands of the Texas state legislature, the ordinance is set to take effect before the next legislative session in 2019. Therefore, the ordinance is likely to take effect and remain in effect for at least a while.
Regardless of the ultimate fate of the Austin ordinance, many employers across the country consider it a warning sign that local regulation of the employment relationship is no longer restricted to traditionally “blue” locales. Although Austin is arguably an island of “blue” within the vast “red” sea of Texas, similar legislation is being considered in Dallas, as well as several other states, counties, and cities across the country in areas that are not generally considered to be unfriendly to business. At a minimum, the Austin ordinance is a sign that local regulation of the employment relationship is officially a national trend that will result in additional compliance challenges, especially in jurisdictions that have traditionally been considered uniform and predicable. The next city ordinance may very well be a living-wage ordinance in Houston or Atlanta.
Summary of the Austin sick leave ordinance:
- Effective dates. Scheduled to take effect on October 1, 2018, for employers with six or more employees, and on October 1, 2020, for employers with five or fewer employees.
- Coverage. Applies to all private employers, regardless of size or number of employees. An employee in Austin is eligible for mandatory sick leave if at least 80 hours of work is performed in a calendar year. Only employees qualify; true independent contractors do not.
- Accrual of sick leave. Employees earn one hour of sick time for every 30 hours worked. Sick time will start accruing when employment begins or when the ordinance takes effect, whichever is later.
- Caps. Accrued leave will be capped based on employer size. Employers with more than 15 employees in the preceding 12 months must allow eligible employees to accrue up to 64 hours of leave per year. Employers with 15 or fewer employees in the preceding 12 months must allow eligible employees to accrue up to 48 hours per year. Employees may carry over accrued, but unused, sick leave to the next year, but only up to the applicable cap.
- Use of leave. An employee may use sick leave (1) for his own physical or mental illness, injury, or condition; (2) to care for a family member; or (3) to seek medical attention, seek relocation, obtain the services of a victim services organization, or participate in legal or court-ordered actions related to an incident of victimization from domestic abuse, sexual assault, or stalking involving the employee or a family member. An employee must make a timely request for leave before his next scheduled work time, with exceptions for unforeseeable, but otherwise qualifying, absences.
- Notice requirements. Employers must keep records of the amount of sick leave accrued by each employee and provide employees with notice of the amount of accrued leave on at least a monthly basis. Additionally, employers must include a notice concerning the ordinance’s contents in employee handbooks or policies defining sick leave benefits. Finally, once the city provides access to the required posting language on its website, employers must conspicuously post signage describing the ordinance in English and Spanish.
- Penalties. Enforced by the City’s Equal Employment Opportunity and Fair Housing Office. Civil penalties of up to $500 may be assessed for substantiated violations. However, the EEO/FHO may offer an employer 10 business days to voluntarily comply with the ordinance before assessing penalties. Civil penalties will not be assessed for substantive violations until after June 1, 2019.