Austin’s Paid Sick Leave Law Found Unconstitutional

Originally published by Alyson Brown.

In May, we wrote about the rise of paid sick leave laws in cities and states around the country. The first city in Texas to pass such an ordinance was Austin, which required privately owned businesses to provide paid sick leave to employees who work at least 80 hours per year within the city limits.

The ordinance was immediately challenged in court. Last Friday, the 3rd Court of Appeals in Austin ruled that the law was unconstitutional and was preempted by the state’s minimum wage law. The three-judge panel ordered a district court judge who originally heard the case to issue a temporary injunction against the ordinance, the Texas Tribune reported. The judges also remanded the case back to the district court “for further proceedings consistent with [the appeals court’s] opinion.”

According to the opinion:

… ‘wage’ generally refers to payment or compensation for work done or services rendered. These definitions do not, however, necessarily preclude the inclusion of paid sick leave in the meaning of ‘wage.’ More importantly, under the terms of the Ordinance, employees who earn and take paid sick leave 21 will be paid more than employees who work the same hours without paid sick leave. Stated differently, employees who take sick leave will receive more pay per hour than actually worked. Thus, the Ordinance establishes a wage.

For now, employers with workers in Austin can take the city’s paid sick leave ordinance off their worry list. We’ll continue keeping tabs on this lawsuit, as well as any legislation on the subject (such as H.B. 222, filed by State Rep. Matt Krause, R-Fort Worth, which would prohibit a municipality from requiring an employer to provide paid sick leave.).

For assistance with compliance with federal, state, or local employment leave laws, contact Clouse Brown PLLC.  Our attorneys are available to counsel executives who may be affected by laws mandating various types of employee leave, such as vacation leave, sick leave, or medical leave. We also advise employers and business owners regarding employment leave laws.

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