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Austin, Texas Passes Paid Sick and Safe Leave Law

03/15/18

Author: ADP Admin/Tuesday, March 13, 2018/Categories: State Compliance Update, Texas

The Austin City Council has passed an ordinance requiring employers to provide paid sick and safe leave (PSSL) for employers with six or more employees, making Austin the first city in the South to enact this type of law. The new law will take effect for employers with six or more employees on October 1, 2018. It will not impact employers with five or fewer employees until October 1, 2020.

Covered Employers
Employer means 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 term does not include:
  • The United States
  • A corporation wholly owned by the government of the United States
  • The state or a state agency
  • A political subdivision of the state, or other agency that cannot legally be regulated by City ordinance

Note: For an employer with no more than 5 employees at any time in the preceding 12 months, excluding family members, this ordinance is not in effect until October 1, 2020.

Covered Employees
A covered employee means an individual who performs at least 80 hours of paid work for an employer within the City of Austin in a calendar year. This includes work performed through the services of a temporary or employment agency.

Covered employee does not include an individual who is an independent contractor or unpaid intern.

Accrual, Frontloading, and Use
Accrual: Employees will accrue one hour of earned sick time for every 30 hours worked for an employer in the City of Austin. Earned sick time will accrue only in hour-unit increments. Employees cannot accrue a fraction of an hour of earned sick time.
  • Employers who employed more than 15 employees (excluding family members) at any time within the preceding 12 months must provide employees with up to 64 hours of earned sick time a year.
  • Employers who employed 15 or fewer employees (excluding family members) at any time within the preceding 12 months must provide employees with up to 48 hours of earned sick time a year.

An employee exempt from overtime wage requirements under the federal Fair Labor Standards Act is assumed to work 40 hours each workweek. If the employee’s normal workweek is less than 40 hours, the number of hours in the normal workweek should be used to determine the employee’s earned sick time allotment.

Flat Amount (Frontloading):  At the beginning of each year, an employer may award an employee the full amount of earned sick time that would accrue over the course of the year rather than awarding the leave as it accrues throughout the year.

Use: Employers are not required to allow employees to:
  • Use earned sick time during the employee’s first 60 days of employment if the employer establishes that the employee’s term of employment is at least one year.
  • Use more than 64 hours of earned sick leave in a year if employed by a medium or large employer (with more than 15 employees).
  • Use more than 48 hours of earned sick leave in a year if employed by a small employer (15 or fewer employees).

Carryover Limit
All available earned sick time (up to the yearly cap) will be carried over to the following year. If an employer frontloads at least the yearly cap of earned sick time, they are not required to allow the carryover of earned sick time.

An employee who is let go or leaves a position and is rehired by the same employer within 6 months may use any earned sick leave that was available at the time of their departure.

Rate of Pay Requirements
When paying employees for time taken under Austin’s earned sick leave provision, employers must 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.

Notice Requirements
An employer that provides an employee handbook to its employees must include a notice of employee rights and remedies under the Earned Sick Time chapter of the employee handbook.

An employer should display a sign describing the requirements of the Earned Sick Time chapter in at least English and Spanish in a conspicuous place or places where employee notices are typically posted. An employer is not required to post this signage until the City of Austin makes the signage publicly available on its website.

Pay Statement Requirements
At least once per month, employers must provide each employee with an electronic or written statement showing the amount of the employee’s available earned sick time.

Prohibitions & Penalties
Employers may not retaliate against employees for requesting or using earned sick time, reporting a violation, or attempting to exercise their right to paid sick leave in accordance with the ordinance.

The ordinance will be enforced by the City of Austin Equal Employment Opportunity/Fair Housing Office. Employers are expected to implement these rules. Implementing rules are expected to follow. A civil penalty of up to $500 applies for each violation.

Coverage: Employers with employees who work in the City of Austin.

Effective: For most employers (with six or more employees), the law takes effect on October 1, 2018. For employers with five or fewer employees, it takes effect on October 1, 2020.

Action Required: Guidance interpreting the new PSSL has not yet been issued, and there are early indicators that the Texas Legislature will take steps to curtail the Austin ordinance in its next session. The Legislature is more conservative than the Austin City Council and is likely to pursue legislation to preempt and undo the Austin ordinance. If the Legislature takes these steps as anticipated, it will likely do so after the ordinance has taken effect. As such, employers operating in Austin should begin making preparations to comply with the ordinance. Once guidance is issued on the law’s interpretation, our Sick Leave Toolkit, which includes Frequently Asked Questions and model sick leave policies for jurisdictions with sick leave laws, will be updated to include Austin PSSL. The updated Toolkit will be available on FormSource in the Leave and Return to Work section or in your Forms Library, as applicable.

As always, please be sure to contact your HR Business Partner if you have any questions.

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