Hunton Employment & Labor Perspectives

Earlier this year, Dallas passed an ordinance requiring all private employers to provide paid sick leave to employees. The Dallas ordinance follows similar laws passed recently in both Austin and San Antonio.

While a district court held the Austin ordinance unconstitutional and preempted its enactment pending a forthcoming Texas Supreme Court decision, the Dallas Ordinance is still set to go into effect August 1, 2019 for businesses with more than five employees (while those with five or fewer have until August 1, 2021 to comply).

The Dallas Ordinance

 Coverage. The ordinance covers employees who perform at least 80 hours of work for a private employer in Dallas in a calendar year, including work performed through a temporary employment agency. Independent contractors, unpaid interns, and public employees are not covered. The law also applies to employees under a collective bargaining agreement (CBA), but the CBA may modify certain provisions with adequate notice.

Notice Requirements. Employers must post a sign displaying any paid sick leave policy, and employers with a company handbook must include a notice of employer’s paid sick leave policies. At least each month, employers must provide each employee with a statement showing the employee’s amount of available earned paid sick leave.

Leave Amount, Accrual, and Payment

Accrual. Eligible employees accrue one hour of paid sick leave for every 30 hours worked, beginning on the later of: 1) an employee’s commencement of employment, or 2) the applicable effective date of the ordinance. The leave must accrue in one-hour increments unless the employer provides a written policy establishing accrual in smaller increments.

Accrual Cap. The employer’s size determines the leave accrual cap, unless the employer chooses a higher limit. For employers with 16 or more employees, accrual is capped at 64 hours per year; for employers with 15 or less employees, accrual is capped at 48 hours per year. For purposes of the accrual cap, a year means the calendar year, unless the employer provides written notice to the employee of a different 12-month measurement.

Carryover. Employers must allow carryover of unused accrued leave, subject to the annual caps based on the employer’s size. Consequently, an employee can accumulate up to twice the annual cap. Employers can avoid the carryover requirement by “frontloading” the leave to employees, in the amount of the applicable annual cap, at the beginning of the year.

Payment. Employers are required to pay an employee using paid sick leave the same amount the employee would have earned if at work. This amount need not include overtime premium, tips, or commissions, but must at least equal the state minimum wage (currently $7.25/hour in Texas).

The ordinance does not specify whether or not the employer must pay out any accrued leave at the end of an employee’s employment, but it does state that any employee who is transferred to a new facility, or who is rehired within six months, must have their leave reinstated.

Leave Usage 

Permitted Use. Paid sick leave may be used due to an employee’s or family member’s illness, injury, or health condition, including preventative care. Also covered is absence due to the employee’s or family member’s need to seek medical attention, relocation, services of a victim services organization, or to participate in legal action related to domestic abuse, sexual assault, or stalking. Under the ordinance, covered family members include a child, parent, or spouse, or any other individual related by blood or whose close association with the employee is the equivalent of a family relationship.

Employees can begin using leave as accrued, and employers cannot require an employee to find a replacement to cover the hours for use of the paid sick leave. An employer also may not prevent employees from donating their accrued leave to coworkers, or from trading hours or shifts to avoid using accrued leave.

An employer may, however, restrict leave usage during the employee’s first 60 days of employment if the employee’s term of employment is at least one year. Thus, an employer in an at-will relationship with an employee cannot restrict that employee’s usage. An employer may also limit the use of paid sick leave to up to eight days per calendar year, but employers are prohibited from retaliating against any employee who uses paid sick time.

Leave and Verification Requests. Under the ordinance, employees may take paid sick leave if they make a timely request before their scheduled work time. However, an employer cannot prevent an employee from using paid sick leave for an unforeseen absence due to care for a family member under the ordinance.

When an employee uses paid sick leave for more than three consecutive days, an employer may request reasonable verification that the use qualifies under the ordinance. However, an employer cannot require the employee to explain the nature of any domestic abuse, sexual assault, stalking, illness, injury, health condition, or other health need.

Next Steps

While a Texas Supreme Court decision is pending regarding the legality of paid sick leave ordinances, a decision is not likely to come down before the Dallas ordinance takes effect. With the ordinance set to go into effect in less than a month, Dallas employers should begin to prepare paid sick leave policies and procedures in order to comply.