The Dallas City Council recently enacted a paid sick leave ordinance that requires private employers to provide eligible employees with paid sick leave. It’s important for Dallas employers to understand their obligations under this new law, which we summarize below.
Before we do that, however, a big picture consideration: the ordinance seems likely to face legal challenges that may delay, if not altogether prevent, it from taking effect. The Third Court of Appeals recently found that a similar ordinance in Austin violated the Texas Minimum Wage Act and the Texas Constitution. That decision is currently on appeal to the Texas Supreme Court, and the Austin ordinance is enjoined from taking effect until that litigation is resolved. It would be surprising if the Dallas ordinance does not face a similar legal challenge in the courts.
Additionally, proposed legislation was considered at the most recent Texas legislative session that would have blocked the Dallas ordinance. The legislation initially appeared poised to pass, but ultimately the bills missed the deadline to be considered on the House floor, effectively killing them. Thus, a court challenge seems most likely.
Assuming the ordinance takes effect, Dallas employers will need to understand the new paid sick leave obligations and make changes to their policies and practices in order to comply. Some of the key provisions of the Dallas ordinance are as follows:
- Effective Date. For employers with more than five employees, the ordinance is effective August 1, 2019. For employers with five or fewer employees (at any time in the preceding 12 months), the ordinance is effective August 1, 2021.
- Eligible Employees. Employees eligible for paid sick leave under the ordinance are those who perform at least 80 hours of work for pay in a year within the City of Dallas (including through the services of a temporary of employment agency). The ordinance does not apply to independent contractors.
- Accrual. Eligible employees accrue one hour of paid sick time for every 30 hours worked for the employer in the City of Dallas, starting at the commencement of employment or the effective date of the ordinance, whichever is later. Paid sick time accrues in one hour increments, unless the employer has a written policy establishing accrual in fraction of an hour increments. Sick leave that is requested in excess of the employee’s available accrued paid sick time need not be paid.
- Accrual Cap. For medium or large employers—defined as an employer with more than 15 employees at any time in the preceding 12 months (excluding the employer’s family members)—there is a yearly accrual cap of 64 hours of paid sick leave, unless the employer chooses a higher limit. For small employers—an employer that is not a medium or large employer—the yearly accrual cap is 48 hours of paid sick leave, unless the employer chooses a higher limit.
- Carry Over. All accrued, unused paid sick time is carried over to the following year, subject to the accrual cap. Alternatively, to avoid the administrative burden of accrual and carry over, employers can simply provide employees with at least the yearly cap of paid sick time at the beginning of the year.
- Eligible Uses. Eligible employees can request and use paid sick time for a work absence caused by: (1) the employee’s physical or mental illness, physical injury, preventative medical or health care or health condition; (2) the employee’s need to care for the employee’s family member’s physical or mental illness, physical injury, preventative medical or health care or health condition; or (3) the employee’s or the employee’s family member’s need to seek medical attention, seek relocation, obtain services of a victim services organization, or participate in legal or court ordered action related to an incident of victimization from domestic abuse, sexual assault, or stalking involving the employee or the employee’s family member.
- Family Member. “Family member” includes an employee’s spouse, child, parent, any other individual related by blood, or any other individual whose close association to an employee is the equivalent of a family relationship.
- Probationary Period. Generally, paid sick time is available for an employee to use as soon as it is accrued. However, employers may restrict an employee from using accrued paid sick time during the first 60 days of employment if the term of the employee’s employment is at least one year.
- Verification. Employers may adopt reasonable verification procedures to establish that an employee’s request to use accrued paid sick time is in accordance with the ordinance, if an employee requests to use accrued paid sick time for more than three consecutive work days. However, the verification procedures cannot require the employee to disclose or explain the nature of the illness, injury, health condition, domestic abuse, sexual assault, stalking, or other health need.
- Pay Rate. Paid sick time must be paid 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 to Employees. At least monthly, employers must provide electronically or in writing to each employee a statement showing the amount of the employee’s accrued paid sick time. Further, any employee handbook provided to employees must include a section informing them or their rights and remedies under the ordinance, and employers must conspicuously display in the workplace a sign describing the requirements of the ordinance.
- Termination of Employment. The ordinance is silent on whether accrued, unused paid sick leave must be paid out to the employee upon separation of employment.
Next Steps: Dallas employers can respond to the new ordinance in a couple of ways, depending on their appetite for risk. Since a legal challenge seems likely, employers can take a more “passive” approach that involves monitoring the status of the ordinance and leaving ample time before the effective date to implement necessary policy changes. Alternatively, because the bill goes into effect on August 1, 2019 for employers with more than 5 employees, these employers may opt for an “active” approach that involves making (or at least planning) policy changes now in anticipation of the ordinance taking effect in less than two months. If you need advice on the new law, please contact Lee Szor (LSzor@FoxRothschild.com) or John Gessner (JGessner@FoxRothschild.com) in our Dallas office.