Texas Appellate Court Finds Austin’s Paid Sick Leave Ordinance Unconstitutional

Texas Appellate Court Finds Austin’s Paid Sick Leave Ordinance Unconstitutional

The City Council of Austin, Texas enacted a paid sick and safe leave ordinance (“Ordinance”) in February of 2018. The Texas Appellate court, however, found the law to be unconstitutional.

Austin’s Paid Sick and Safe Leave Ordinance

As the name implies, the Ordinance would have required employers to provide paid sick and safe leave to its workers. Under the law, employers with 15 or more workers had to provide eight days of paid leave; companies with fewer than 15 employees had to provide six days of sick leave. The law was scheduled to become effective October 1, 2018 for employers with five or more employees and on October 1, 2020 for employers with less employees. Employees who work a minimum of 80 hours in Austin in a calendar year would be covered under the Ordinance.

The Ordinance allowed paid sick and safe leave can be used for an employee’s:

  • Own physical or mental illness or injury, preventative medical or health care, or health condition;
  • Care for a family member with a physical or mental illness, preventative medical or health care, injury or health condition; and
  • 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 a family member.

Although employees must make a timely request for leave prior to taking the time off, employers may not deny a workers’ leave for an unforeseeable qualified absence.

With the ordinance Austin, Texas joins several county, state, and local governments that have enacted similar paid sick leave laws just in 2018.

The Appellate Court’s Decision

In Texas Association of Business et. al v. City of Austin, Texas the Appellate Court ordered the district court to grant a temporary injunction barring the implementation of the Ordinance. In its decision, the Court held the Texas Minimum Wage Act (“TMWA”) preempted the Ordinance and the state constitution bars city ordinances that conflict with state law. The TMWA prohibits municipalities from regulating wages for employers who are subject to minimum wage requirements of the Fair Labor Standards Act (“FLSA”). The Appellate Court noted the Ordinance regulated wages since it requires employers to pay employers for hours that are not worked, essentially raising the rate of pay for hours worked. Because the TMWA establishes a wage, the Appellate Court reasoned, the Ordinance violated the act and was unconstitutional.

The City of Austin argued that wages under TMWA referred only to payments made by employers to workers for compensation of their services and not additional benefits. The Appellate Court disagreed, noting wages did not necessary prohibit the inclusion of paid sick leave.

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