What Austin Employers Need To Know About New Paid Sick Time Ordinance

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje & Ladik, PLLC.

On Friday, February 16, 2018, Austin became the only Texas municipality to enact a paid sick time ordinance applicable to private employers. There is no corresponding Texas state law which mandates paid sick time in the private sector.

What Employers Are Covered By The Ordinance?

The ordinance applies to any “person, company, corporation, firm partnership, labor organization, non-profit organization or association that pays an employee to perform work for an employer and exercises control over the employee’s wages, hours and working conditions.”

The ordinance does not limit its coverage to employers with a minimum number of employees. For employers with less than six employees, excluding family members, the ordinance is not effective until October 1, 2020.  For all other employers, the ordinance is effective on October 1, 2018.

The ordinance does not apply to (1) the United States; (2) a corporation wholly owned by the government of the United States; (3) the state or a state agency; or (4) a political subdivision of the state, or other agency that cannot legally be regulated by municipal ordinance.

What Employees Are Covered By The Ordinance?

The ordinance covers any “individual who performs at least 80 hours of work for pay within the City of Austin in a calendar year for an employer, including work performed through the services of a temporary or employment agency.”  The ordinance does not apply to independent contractors or unpaid interns.

How Much Paid Sick Time Is Mandated By The Ordinance?

An employer must grant one hour of earned sick time for every 30 hours worked for the employer. Earned sick time is available to an employee as soon as it is accrued. Earned sick time accrues only in hourly increments.

The ordinance does not affect employer policies which allow an employee to donate unused accrued sick time to another employee.

Are There Any Caps to Paid Sick Time Mandated By The Ordinance?

An employee of an employers with 15 or fewer employees , excluding family members, can accrue up to 48 hours of earned sick time in a calendar year. An employee of a larger employer can accrue up to 64 hours of earned sick time in a calendar year. All available earned sick time up to the applicable limit shall be carried over to the following year.

An employer is not required to allow use of earned sick time by an employee for more than 8 calendar days in a calendar year.

For What Absences Can Paid Sick Time Be Used By An Employee?

An employee is entitled to available paid sick time if the employee makes a timely request for used of earned sick time before the employee’s scheduled work time.  There is an exception for unforeseeable absences.

Available paid sick time can be requested by an employee for an absence caused by:

  1. the “employee’s physical or mental illness or injury, preventative health care or health condition”;
  2. the “employee’s need to care for a family member’s physical or mental illness, preventative medical or health care, injury, or health condition”; or
  3. the “employee’s need to seek medical attention, seek relocation, obtain services of a victim services organization”, or to participate in legal or court ordered action related to an incident of victimization from domestic abuse, sexual assault, or stalking involving the employee or employee’s family member.”

The tem “family member” is defined as an employee’s “spouse, child, parent, or any other individual related by blood or whose close association with the employee is the equivalent of a family relationship.”

Can an Employer Require Verification Before Paying For Sick Time?

It depends. An employer may adopt reasonable verification procedures to establish that an employee’s request for earned sick time for more than three consecutive work days is for a qualifying absence. The ordinance makes no mention of absences of other durations.

How Is Paid Sick Time Calculated?

The employer shall pay earned sick time in an amount equal to what the employee would have earned if the employee had worked the scheduled work time, exclusive of any overtime premium, tips, or commissions, but no less than the state minimum wage.

What Does The Ordinance Proscribe?

An employer may not:

  1. require “an employee to find a replacement to cover the hours of sick time as a condition of using earned sick time”;
  2. erase accrued paid sick time upon “an employee’s transfer to a different facility, location, division, or job position”;
  3. “transfer, demote, discharge, suspend, reduce hours, or directly threaten these actions against an employee for requesting or using earned sick time, or for reporting a violation or participating in an administrative proceeding under” the ordinance.

What Records Are Mandated of Employers By The Ordinance?

On at least a monthly basis, an employer must provide electronically or in writing to each employee a statement showing the amount of the employee’s available earned sick time.

An employer that provides an employee handbook to its employees must include therein a notice of employee rights and remedies under the ordinance.

Each employer must display a sign in an conspicuous place or places where employee notices are customarily posted.

Does The Ordinance Provide Employees With A Private Right Of Action?

No. For violations, the ordinance only provides for a civil penalty assessed by the City.

How Is The Ordinance Enforced?

The ordinance is enforced by the City of Austin Equal Employment Opportunity/Fair Housing Office (“Office”).  A complaint alleging a violation must be filed with the Office by or on behalf of an aggrieved employee within two years from the date of the violation.

What Is The Civil Penalty For Violation Of The Ordinance?

For an employer with six or more employees, no civil penalty for a substantive violation may be assessed prior to May 1, 2019.  Thereafter, an employer which fails to cease a violation by the end of the 10th business day after the employer receives notice of the violation by the Office is liability to the City for a civil penalty of up to $500 for that violation.

Civil penalties of $500 per violation for retaliation, however, can be assessed on and after the applicable effective date.

Are Any Affirmative Defenses Available To Employers Under The Ordinance?

The ordinance does not expressly provide any affirmative defense for a failure to pay an employee earned sick time.  Presumably, however, the Office will consider any lawful reason for any adverse employment action taken against an employee who has (1) requested or used earned sick time, (2) reported a violation of the ordinance, or (3) participated in an administrative proceeding under the ordinance.

What Must Austin Employers Be Doing Now?

Depending on the applicable effective date, Austin employers have time to develop policies and procedures to conform to the standards set forth in the ordinance. For planning decisions which must be made long before October 1, 2018, however, larger employers must be cognizant of the unique requirements which will soon be applicable to employees working within the city limits of Austin.

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