Austin, TX Paid Sick Leave

Update: On November 16th, the Texas Court of Appeals for the Third District ruled the ordinance violates the Texas Constitution because it is preempted by the Texas Minimum Wage Act.  We are monitoring this legislation and will update accordingly.

On February 16, 2018, the city of Austin, TX passed a new ordinance of paid sick time.  This Act has an effective date of October 1, 2018 but due to the recent passage, final regulations have not yet been released. The following information is contained in the bill, but we expect additional regulations from the Austin City Council.

Coverage

Employees qualify for sick leave under the Ordinance if they perform at least 80 hours of work in a calendar year for a covered business. Employers with 6 or more employees have an effective date of October 1, 2018 and those employers with 5 of fewer employees have an effective date of October 1, 2020.

Sick Leave Accrual and Entitlement

Qualifying employees begin to accrue paid sick leave on October 1, 2018, or the first day after they start employment, if hired after October 1. Employees accrue one hour of paid sick leave for every 30 hours worked.  Employers do have the option to frontload the hours at the beginning of the calendar year.

The law permits businesses with 15 or more employees to cap the accrual of paid sick leave at 64 hours per 12-month period based on employee anniversary. Businesses with 15 or fewer employees have a cap of 48 hours per 12-month period based on employee anniversary. Employees can carry over up to 64 or 48 hours (depending on employer size) to the subsequent 12-month period. If the employer chooses to frontload the hours then employers are not required to allow carry over. Employers are permitted to cap the annual use of paid leave at 64 or 48 hours per employee.

Employers do not need to pay out any unused sick leave as cash upon termination. Employees must have their unused accrued hours reinstated if they are rehired within six months.

Approved Uses

Employees must have the ability to begin using accrued paid sick leave no later than their 60th calendar day after their employment commences. Employees can use the leave for their own health condition, physical or mental illness, or injury, or that of the employee’s blood-related family member. Employees may also use paid sick leave to seek medical attention, seek relocation, obtain victim services, or participate in legal action related to domestic abuse, sexual assault, or stalking involving the employee or family member.

Employees may provide notice as soon as practicable. Businesses also may require the employee to certify that leave is for a qualifying purpose, but only if the employee requires more than three consecutive leave days. Businesses cannot require the certification to specify the nature of the medical issue necessitating the leave.

Existing PTO Policies

If an employer currently has a policy that grants employees paid time off in a manner consistent with the new requirements, it need not provide additional paid leave. It will, however, need to conform its policy to meet the requirements of this new law.

Notice

Starting on October 1, 2018, covered businesses must conspicuously post a notice describing employee rights under the Act. Businesses must post this notice in English and Spanish in each facility where any eligible employee works. Employers must include a notice of employee rights and remedies under the ordinance in their employee handbook.

On at least a monthly basis, an employer must provide electronically or in writing to each employee a statement showing the amount of the employee’s available earned sick time. The employer also must maintain records establishing the amount of earned sick time accrued and used by each covered employee.

Thank you for choosing Paylocity as your Payroll Tax partner. Should you have any questions please contact your Paylocity Account Manager.

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.