86th LegislatureStatewide NewsTaxes & SpendingMajor Texas Cities Attempting to Mandate Paid Sick Leave on Employers Plagued by Lawsuits

Paid sick leave ordinances that passed in several major Texas cities are currently held up in several court cases, including one at the Texas Supreme Court.
December 13, 2019
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The city councils of Austin, Dallas, and San Antonio have all passed ordinances to require employers to provide paid sick leave, but those ordinances are being challenged by multiple lawsuits arguing that they violate the Texas Minimum Wage Act (TMWA).

Austin and Dallas both passed ordinances requiring employers to provide 1 hour of paid sick leave at the same rate as an employee’s normal hourly wage for every 30 hours worked.

For those cities, the required amount of paid sick leave is capped annually at 64 hours for employers with more than 15 employees and at 48 hours for employers with 15 or fewer employees.

San Antonio’s ordinance applies to all employers and requires them to provide 56 annual hours of paid “sick and safe” leave.

In all ordinances, if employees are represented by a labor union, the union is allowed to modify the caps through negotiations with the employer.

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Employers of non-unionized employees are not given a means of negotiating a different policy with their employees, but must comply with the standards of the ordinance.

Austin was the first of the three cities to pass an ordinance in 2018 with a 9-2 vote by the city council.

The ordinance was supposed to go into effect on October 1, 2018, but was delayed in August so that the Third Court of Appeals could hear arguments on the lawsuit made against it by several pro-business groups and the State of Texas.

In November of last year, the appellate court found that the city’s ordinance violated the TMWA, which prohibits municipalities from instituting wage requirements on any employer that falls under the jurisdiction of the federal minimum wage law — essentially every private employer.

Proponents of the ordinances contend that the paid sick leave is a “benefit,” not a “wage,” and therefore is not subject to the law.

Austin filed an appeal with the Texas Supreme Court, where the case is still pending.

Despite the ruling from the appellate court, the city councils of Dallas and San Antonio moved forward in passing ordinances of their own to mandate employers to provide paid sick leave for any employee that works inside city limits, regardless of where the business is located.

In Dallas, the State of Texas joined another lawsuit against the measure — this time brought before the U.S. District Court in the Eastern District of Texas, where the case is currently pending.

One of the plaintiffs in the case is Employee Staffing, Inc. (ESI), a temporary staffing agency located in Deer Park that has many employees who work within Dallas city limits.

According to the lawsuit, ESI estimates compliance with the ordinance will cost the business $279,000 annually for leave paid out in addition to hiring another employee at $60,000 annually to track and coordinate the sick leave payments.

Furthermore, ESI says that their particular business model could incur twice the expenses. When an employee takes sick leave, the staffing company says it will need to pay the sick employee and still fill the temporary position with another employee.

The ordinance went into effect on August 1, 2019 for businesses with more than 5 employees, but the city says it will not enforce it until April 1, 2020. For businesses with 5 or fewer employees, it will not become effective until August 1, 2021.

San Antonio passed an ordinance earlier this year, but it was delayed in August and modified. The city council’s final version was supposed to go into effect on December 1, 2019, but a state district court granted a temporary injunction for the case to be heard.

Legislation to clearly prohibit the city paid sick leave ordinances was introduced during the past legislative session, but was held up after it encountered opposition from progressive activists concerned about language in the bill that might threaten municipal non-discriminatory ordinances.

With the three ordinances all facing lawsuits — including one at the state supreme court — it is only a matter of time before the legality of these measures is determined.

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Daniel Friend

Daniel Friend

Daniel Friend is a reporter for The Texan. While recently finishing his degree in Political Science from Azusa Pacific University, he also interned in the U.S. Senate and co-authored a book on C. S. Lewis’s science fiction trilogy. In his spare time, he might be reading up on Dostoevsky or attempting to write a novel.