City of Austin Sued over Paid Sick Leave Ordinance: Temporary Injunction Denied

By Jeanine Lehman, Attorney at Law

On April 24, 2018, the Texas Public Policy Foundation on behalf of a business coalition including the Texas Association of Business, the National Federation of Independent Business, American Staffing Association and four corporations that provide temporary staffing in the Austin area filed suit against the City of Austin challenging Austin's sick leave ordinance in Travis County District Court. The lawsuit alleges that the ordinance is preempted by the Texas Minimum Wage Act and violates the Texas Constitution. On April 30, 2018, Texas Attorney General Paxton intervened in the lawsuit on behalf of the State of Texas in opposition to Austin’s sick leave ordinance. The opponents of the ordinance sought a temporary injunction to stop implementation of the ordinance. On June 26, 2018, the judge denied
the request for a temporary injunction. An appeal of that ruling has been filed with the Texas Third Court of Appeals. A trial on the merits is expected to proceed in Travis County at a future date.
Most employers, including dental practices, must comply with the ordinance starting October 1, 2018. If your dental practice has not already completed its employment policies and procedures for compliance with the ordinance, start today! That is, unless there is a court ruling stopping the ordinance between the penning and publication of this article. Small employers with no more than 5 employees (including family members) at any time in the preceding 12 months have a delayed compliance date of October 1, 2020.
The City is moving forward with implementation of the ordinance. On June 18, 2018, the Human Resources Department of the City of Austin proposed rules for enforcing the sick leave ordinance, including a schedule of employer fines for noncompliance. The City has also added a page on its website to address the sick leave ordinance at www.austintexas.gov/EarnedSickTime
For background – On February 15, 2018, the Austin City Council adopted a controversial ordinance requiring private employers (including dental practices) to provide paid sick leave for employees. That Ordinance No. 20180215-049 is at www.austintexas.gov/edims/document.cfm?id=293797 Employees accrue one hour of paid sick leave for every 30 hours worked in Austin for the employer. Paid sick leave will accrue starting at the commencement of employment, or the date that the ordinance is effective, whichever is later. Generally, sick leave is available to use as soon as it is accrued. The ordinance applies to all types of employees, including temporary, part-time, and full-time, and does not distinguish between employees who are covered by overtime regulations and those who are exempt from overtime, such as dentists. However, an individual, who is an independent contractor according to Texas Workforce Commission rule 821.5, is not an employee under the ordinance. The yearly caps for paid sick leave are: (1) 48 hours per employee per calendar year for employers with 15 or fewer employees and (2) 64 hours per employee per calendar year for employers with more than 15 employees. The ordinance has many other requirements that need to be a part of dental practice’s employment policies and procedures.

 

Jeanine Lehman is an Austin, Texas dental, health and business law attorney with a statewide practice – www.jeanine.com. She can be reached at (512) 918-3435 or Jeanine@Jeanine.com. © Jeanine Lehman 2018. This article is not legal advice.

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