NEXT STEPS: LOCAL PAID SICK LEAVE MANDATES
In our last installment, we discussed the status of action by the Texas Legislature to block local paid sick leave ordinances that have passed in Austin, San Antonio, and Dallas. This preemptive legislation did not pass in the Texas House and therefore was not signed into law. That means that local paid sick leave ordinances in San Antonio and Dallas will come into effect starting August 1, 2019, unless some other action is taken. The latter part of this article will describe the ordinance in detail, but let’s start with who is affected and who is not.
WHO IS NOT AFFECTED?
The ordinance does not require providing paid sick leave in the following circumstances:
- Terminated employment: The ordinance does not address terminated employment (whether the employee quit or was fired) and so will not require employers to pay terminated employees for their unused paid sick leave.
- Employers who have a PTO policy in place that exceeds the requirements of this ordinance, whether or not the PTO is classified as “sick leave”: This means that employers who currently offer PTO at or above the cap and in accordance with the usage requirements do not need to make adjustments to their policies.
- Independent contractors
- Unpaid interns
- Government agencies (government workers, state agencies)
WHO IS AFFECTED?
The ordinances require employers in San Antonio and Dallas to provide paid sick leave to their employees. The City of Dallas has not yet posted their full ordinance, but the City of San Antonio does have theirs available on their website, which is accessible via the following link:
For this reason, we will focus on the particulars of the San Antonio ordinance throughout the remainder of this article.
The San Antonio ordinance defines “employee” as “an individual who performs at least 80 hours of work for pay within the City of San Antonio, Texas in a year for an employer including work performed through the services of a temporary or employment agency. Employee does not mean an individual who is an independent contractor….” Part-timers and temporary employees are eligible.
If an employee is rehired within 6 months of their termination, they should retain the paid sick leave balance they had prior to termination.
In addition, the San Antonio ordinance also applies to transfers “to a different facility, location, division or job position with the same employer.” This portion of the ordinance is somewhat vague and may include out-of-city transfers, though that terminology is not specifically included.
WHAT SHOULD EMPLOYERS DO?
Employers with staff in San Antonio and Dallas should be aware of these ordinances and be ready to be in compliance when they come into effect. Because there is still time for a challenge to occur, the best thing for employers may be to make a plan but wait to implement it until the ordinances come into effect:
- August 1, 2019: Implementation/enforcement begins for medium and large employers (per the San Antonio ordinance, “an employer with more than 15 employees at any time in the preceding 12 months, excluding family members”).
- August 1, 2021: Implementation/enforcement begins for small employers (per the San Antonio ordinance, “any employer that is not a medium or large employer,” as defined above).
WHAT ARE THE REQUIREMENTS?
The San Antonio ordinance states that employees should accrue 1 hour of paid sick leave per 30 hours worked, with the following caps:
The paid sick leave can be used to care for a family member or someone who is like a family member to the employee. The ordinance requires that employees carry unused time to the next year as long as they do not surpass the cap; however, if the employer provides the paid time off in a lump sum at the beginning of the year, they do not need to include any carryover because the employee will have the full amount of paid leave.
In addition to providing paid sick leave, the ordinance requires employers to
- Provide a monthly statement to each employee with their paid sick leave balance
- Post a notice in all appropriate languages (if the San Antonio Metropolitan Health District makes one available)
- Update their employee handbooks to include the paid sick leave policy and a statement on employee rights (applicable to all employers that provide an employee handbook)
Some restrictions may apply to the employer and the employee, which are illustrated in the following table:
The San Antonio ordinance will be enforced by the city’s health department, the San Antonio Metropolitan Health District. Complaints can be filed by or on behalf of the affected employees up to two years after a violation.
Violations will results in a civil penalty, which will not exceed $500 per violation; however, per San Antonio’s ordinance, “Each violation of a particular section or subsection of this Article constitutes a separate offense.”
Most penalties will not be in effect until April 1, 2020, with the exception of penalties for retaliation, which will be in effect starting August 1, 2019. In both cases, businesses will have 10 days to establish “voluntary compliance” with the Ordinance before a penalty is collected.
There is a window of time from August 2019 through the end of March 2020 when businesses may receive a notice that “that a civil penalty may be assessed for a violation that occurs on or after April 1, 2020.” The rules remain unclear as to whether or not penalties will be assessed for violations occurring during this window from August 2019 through the end of March 2020 if the employer does not achieve compliance within 10 days of the written violation notice.
Per the San Antonio ordinance, employers are required to “provide relevant information and testimony when requested by the [San Antonio Metropolitan Health District] for the purposes of determining compliance with this Article.” From here, the ordinance is vague and states, “Relevant information and testimony includes, and is limited to, only the information necessary to determine whether a violation of this Article has occurred.”
The San Antonio Metropolitan Health District may inform other employees that an investigation into an alleged violation is occurring.
WHAT IS THE STATUS OF EACH OF THESE ORDINANCES?
- The Austin City Council was the first to pass their paid sick leave ordinance in February of 2018.Its ordinance was set to go into effect in October of 2018 for medium and large employers and in October of 2020 for small employers (with no more than 5 employees).However, a lawsuit brought in August 2018 resulted in an injunction blocking the implementation of the ordinance. In November 2018, an Appeals Court found it was unconstitutional and preempted by Texas’s minimum wage law. That court remanded the case back to district court for further proceedings, and Austin may appeal that decision.
- The San Antonio City Council next passed their paid sick leave ordinance in August of 2018. San Antonio’s ordinance is based upon Austin’s with the exception that it was scheduled to come into effect much later, on August 1, 2019, after the completion of Texas’s Legislative Session. There have been no legal challenges yet to the San Antonio ordinance.
- The Dallas City Council passed their paid sick leave ordinance in April of 2019. Again their ordinance is based upon Austin’s and has the same implementation date as San Antonio’s: August 1, 2019. Their ordinance has not been challenged in court.
COULD THESE ORDINANCES BE BLOCKED?
Nothing currently blocks the San Antonio and Dallas ordinances from coming into effect on August 1, 2019; however, further legislative or legal action could prevent them from taking effect:
- Legislative Challenge: While Texas’s Legislative Session ended on May 27, Governor Abbott may call a special session to meet specifically on this issue.
- Legal Challenge: Like the Austin ordinance, the San Antonio and Dallas ordinances could be challenged in court if a suit is filed. In addition, because these ordinances are so similar to Austin’s ordinance, the litigation over the Austin ordinance may affect the San Antonio and Dallas ordinances.
Without either of the challenges above, the San Antonio and Dallas ordinances will go into effect on August 1.
FOR MORE INFORMATION
BFG will continue to monitor the situation and will provide updates. For more information or assistance, please contact our Human Resources team at 210–775–6082, toll-free at 1–888–757–2104, or [email protected].