Update on the Paid Sick Leave Ordinance

I am writing today to give you all an update on the City of Austin’s Mandatory Paid Sick Leave Ordinance.
With all the legislative chatter and court actions it is difficult to know where it stands and what is expected of businesses in Austin.
As you may know, during the recent Legislative session the seemingly well-supported statewide bill intended to undo the city’s ordinance failed for lack of a vote in the House. The Governor has said that there will be no special session. So for now, there will be no statewide legislation that will address the ordinance, and therefore, the fate of the ordinance rests in the courts.
In November of 2018, the appellate court ruled that the City of Austin’s sick leave ordinance violated the Texas Constitution by violating the Texas Minimum Wage Act. At that time, the court issued an injunction preventing the ordinance from going into effect. That is where it stands today.
The City of Austin has filed an appeal of that decision to the Texas Supreme Court. The Texas Court is expected to decide whether or not they will take up that appeal by later this summer. If the Court chooses to do so, the possible outcomes are as follows (and expected to be decided before the end of the year):

  1. The Court could rule against the appellate court and overturn the injunction; or
  2. The Court could uphold the injunction; or
  3. The Court could choose not to rule on the appeal.

Under the second two options (which appear to be the most likely scenarios), the case would go back to District Court for arguments on the merits of the lawsuit. This would essentially start the process all over again with the injunction still in place. Until the Texas Supreme Court says otherwise, businesses in Austin cannot be forced to provide paid sick leave. At this point, this seems like an unlikely outcome, but you never know.
As a reminder, businesses with 15 or more employees at any time during the year much provide 8 days of paid sick leave. Businesses with fewer than 15 employees must provide 6 days.
In the meantime, while this is being worked out in the courts, you can take the following steps to prepare your business for the ordinance going into effect. (1) develop paid sick leave policies and procedures that suit your business; and (2) determine the timing and how you would roll out such policies. Another option is to turn your current paid sick days and paid vacation days into personal time. As long as the combined days meet or exceed the required standards, you will be in compliance.
To learn more about the proposed ordinance and rules, you can visit the City’s website: http://www.austintexas.gov/EarnedSickTime
To read more about AIBA’s position on Paid Sick Leave, see:
City of Austin Mandated Paid Sick Leave Ordinance
Business Coalition Challenges Austin’s Burdensome and Unconstitutional Paid Sick Leave Ordinance
Increased Fines for a Bad Attitude? This Devil is in the Details of Paid Sick Leave
Paid Sick Leave Survey Results
Earned Sick Time Update: The Final Rules
Is This How We Govern? Letter to City Council
The Damage Done
Michael Searle, Board Member, Austin Independent Business Alliance, CEO of Aro Group, LLC, an Austin-Based Consulting Firm, and Executive Director of the Austin Civic Fund contributed to this article.