On February 16, 2018, the Austin City Council passed the Austin Paid Sick Leave Ordinance, which requires businesses located and operating within city limits to provide paid sick leave for all employees. The council voted 9 – 2 to pass the ordinance, a move that will undoubtedly affect thousands of businesses within and around the Austin area.
Although Texas lawmakers are already working to reverse the ordinance, businesses should prepare now to be in compliance before the new paid sick leave rule takes effect on October 1.
What Size Businesses Are Covered and What Am I Now Required to Provide?
Most employers will be expected to begin providing paid sick leave for all employees – if they don’t already have paid time off policies in place – beginning October 1, 2018. Private employers with 16 or more employees must provide up to 64 hours, or 8 days, of paid sick per year – accrued at one hour per 30 hours worked. Businesses operating with 6 – 15 employees are required to provide 48 hours, or 6 work days, per year of sick paid leave, accrued at the same rate – one hour per 30 hours worked.
Microbusinesses with 5 or fewer employees are not exempt from the ordinance and will need to comply with the ordinance starting in October 2020.
It’s easy for many businesses to overlook this ordinance when they already have PTO plans in place, but businesses with part-time and seasonal employees that don’t have access to PTO will also be impacted. According to the ordinance, any employee who works more than 80 hours a year – even those hired seasonally, will be able to accrue paid sick leave at the same rate as full-time, permanent employees. Employees who mainly work in another city, but work in Austin for 80 hours or more within a given year would also be covered by the ordinance.
The ordinance will not apply to government agencies or independent contractors. Don’t think that you can get around the Ordinance by making everyone an independent contractor.
My Business is Based Outside of Austin, But My Employees Work In Austin, Do I Need To Comply with the New Ordinance?
Just because your office address is in Pflugerville, or even Round Rock, does not mean you are exempt from this Ordinance. Any business operating within the Austin city limits is required to comply with the new law. This means businesses with employees actively working in Austin – construction workers, for example – will need to pay attention, because they’re not exempt from compliance.
My Company Already Provides PTO, As Such, Am I Exempt From the New Law?
Businesses with paid time-off policies currently in place already will be able to satisfy their compliance as long as they have their plans in place by the time the ordinance takes effect. These PTO plans must also be as generous or more generous than the paid sick leave ordinance, meaning a business that provides 14 days of paid time-off – whether labeled as PTO or sick leave – will meet compliance. However, an employer providing only 40 hours of sick leave to employees would not satisfy the compliance because it’s less than the ordinance’s standard of 48 or 64 hours, depending on the number of employees.
In addition to providing paid sick leave, the ordinance also requires an administrative component that employers will need to post an approved notice of the sick-leave entitlement and include a notice of employees’ rights and remedies within their employee handbooks.
As such, it may be a good time to dust off your employee handbook and take a look at exactly what your policy allows and ensure that it contains the new language.
How Will The City Enforce the New Law? Will They Come to My Business for an Unannounced Audit?
Once the Ordinance takes effect, the city will ensure its enforcement on a complaint-driven basis. Employees can file complaints with the Austin’s Equal Employment Opportunity/Fair Housing Office, and staffers will investigate the issue. A complaint can be filed within two years of an allegation. From there, the director of the Austin EEO/Housing Office can subpoena records or testimony from anyone with relevant information and knowledge of the alleged violation. If it’s determined your business was not in compliance with the rule, your business could face a $500 fine per violation.
What Do I Need to Do to Prepare For This New Ordinance?
Businesses will not only have to accommodate for this new rule by providing sick time available for use when employees accrue it, but also adhering to the administrative component. This means keeping track of accrued paid sick leave for employees and notifying them when it’s available to use, how much they’ve used, and how much leave they have left. Many small teams will feel the bind from the additional administrative work.
The details of the Austin Paid Sick Leave Ordinance demonstrate the effort and attempt by the Austin City Council to expand employee rights regardless of a business’s capability to do so.
It’s imperative for businesses to examine their own policies and seek counsel to ensure they can either meet compliance by the deadline or make other business arrangements to avoid being penalized for non-compliance or denying employee rights.