How To Prepare For Austin Paid Sick Leave: What You Need To Know

AUSTIN, TX — On the eve of an Austin City Council vote on a proposed ordinance requiring employer paid sick leave, many business owners are anxious to learn how such a regulation would affect them if the measure passes.

Austin attorney Frederick Sultan, a litigation attorney practicing labor and employment law with the firm of Gardere, Wynne, Sewell LLP., spoke to Patch about the likely impact to businesses should the mandate secure passage — either through the original ordinance as proposed by council member Greg Casar or a less stringent version offered by his counterpart on the council dais, Jimmy Flannigan, in the 11th hour.

Austin wants to require all employers operating in the city to provide paid sick leave to their workers. Should the city succeed it would be the first Texas city with such a mandate and the only municipality in the entire South with the requirement. A vote on the matter is expected late evening on Thursday, Feb. 15.

The proposal has given rise to a din of debate, pitting proponents framing the safeguard as a fundamental human right against opponents painting the initiative as a potentially job-killing move posing a burdensome and draconian intrusion to already-challenged business owners.Whatever side of the debate one takes, potential passage of the ordinance demands private sector readiness to avoid running afoul of its requirements, Sultan said.

Related stories:

Austin Becomes 1st Texas City Requiring Employer Paid Sick Leave

Battle Lines Drawn As Austin Considers Paid Sick Leave Mandate

Austin Battle Over Worker Paid Sick Leave Mandate Intensifies

"The City of Austin’s proposed sick-leave ordinance clearly has implications for private employers that do not currently provide sick leave or paid time off to their employees," Sultan told Patch. "Should the ordinance go into effect, those employers will need to begin providing benefits and should seek counsel to ensure they are complying with the record-keeping and other aspects of the ordinance."

In a conversation with Patch, Sultan outlined some of the key provisions of the proposed ordinance to ensure employer compliance should the measure gain passage.

Monthly employee notifications on accrued time are key

A big part of that revamped record-keeping, employers would need to provide monthly notifications to employees as to the amount of paid sick leave time they have accrued, Sultan noted. The attorney noted that his advice centered mostly on the original ordinance than Flannigan's proposed alternative. However, both versions call for requiring paid sick time to employees who work a minimum of 80 hours a year in the city of Austin.”

"The ordinance as drafted applies to all employers regardless of size — even if you have only one part-time employee, as long as that employee works more than 80 hours in a calendar year, the employer is required to provide them with sick leave."

Neither version of the proposed ordinance specifies the form that notice should take or prescribe a format, but both allow for electronic notifications. Given that leeway, Sultan said an email to employees could likely suffice as formal notification of accrued sick time.

“Big businesses have the likely wherewithal to hire at least one staffer dedicated to keeping up with employee benefits, including the record-keeping requirements of an ordinance, but in smaller businesses the task might fall on the owner, the attorney said. "I don't see smaller businesses as having the luxury of hiring an extra staff person," Sultan said. "It falls on the owner."

One size does not fit all

Sultan was careful not to make generalized hypotheses on the level of impact to businesses, given the varied array of corporations large and small and the myriad arrangements at each enterprise. The corporate landscape is not a cookie-cutter, and each company would uniquely respond to the provisions of an ordinance.

"There are as many types of employee arrangements as there are businesses in Austin, so it's hard to me to declare a one-size-fits-all proclamation on how to weather the ordinance," the attorney cautioned.

But he agreed the record-keeping requirements alone won’t likely pose an existential threat: "For small businesses, it adds to those challenges," Sultan acknowledged. "My advice is to stay abreast of this issue," Sultan said. "Perhaps make your opinion known as to your concerns, but be aware and stay ahead of it."

Those already offering sick leave also impacted

But bigger businesses already offering compensated time off for health reasons shouldn't rest on their sick-leave laurels. They're potentially impacted as well if they hire contract labor or college interns — a class of workers the ordinance also seeks to protect.

Sultan explains: "What is easy to overlook is that businesses that already offer sick leave would also be impacted. For example, many businesses offer leave for full-time employees, but do not do so for some part time or seasonal employees. As currently proposed, the ordinance requires an employer to provide sick leave for any employee who works for more than 80 hours in a year within the City of Austin. That means that a college student hired over the summer would need to accrue leave. Also, a year-round part-time employee working less than an average of 2 hours per week would begin to earn sick leave. As a result, all employers should review their leave policies to make sure they are ready to comply with these proposed changes to the law."

That part of the ordinance is arguably the portion Sultan hears the most confusion about, he said. But as written in the original ordinance includes a class of workers in the sought protections that traditionally have not been viewed as vested in terms of key company benefits.

Companies with headquarters outside Austin must also comply

Another key provision of the original ordinance is that it would also compel employers with headquarters outside of Austin to follow the guidelines. So long as a company has workers clocking at least 80 hours of labor within the city limits, they would also be subject to the ordinance, Sultan said. The provision would require a heightened level of meticulousness in record-keeping among out-of-city companies to ensure employees are credited for each hour worked within the boundaries of Austin.

"Your typical employer located in Austin with an office in Austin and employees in Austin are not having to worry about that," Sultan said. But a company headquartered in Dallas with an office or employee in Austin, as a hypothetical example, would be compelled to comply with the Austin paid sick leave ordinance, he added: "The ordinance does not pay any attention to the location of the employer, but only focuses on the location of where the employee works."

Yet there are still unknowns that would have to shake out in practice, Sultan acknowledged: "What may be more complex is a company that does not have an office in Austin but employees who perform part of their job in Austin. Do they fall within the ordinance? And if so, how do they report?"

Know your 'employer' status

Depending on which form the ordinance might take (Flannigan's version has a more relaxed approach that would exempt the smallest of businesses from providing paid sick time to workers), it's key for companies to be up on the municipal definition of "employer" vis a vis the ordinance language.

Sultan: "The proposed ordinance’s broad definition of what constitutes an “employer” along with its record-keeping requirements also pose potential traps for the unwary," Sultan said. "As currently drafted, the ordinance defines 'employer' to include any individual or entity, regardless of size, 'that pays an employee to perform work for the employer and exercises control over the employee’s wages, hours and working conditions.' That means anyone who employs a single part-time employee could be considered an employer required to conform to the ordinance. Employers are not only required to provide leave, but also required to provide a monthly accounting to their employees of any accrued leave and to keep the ordinance’s requirements posted conspicuously in the workplace. Small businesses, and particularly individuals, may be caught unaware that they are subject to these new sick-leave requirements."

Whatever form it takes, pay attention

The original ordinance proposed by Casar has been championed by those advocating for the working class. Among those proponents, Flannigan's version was met with outcry while cheered by small business owners operating in the city. Flannigan's alternate version would exempt businesses with fewer than five employees from having to provide them with paid sick leave, and extend the probationary period to six months. Flannigan's version also reduces the amount of hours individuals are allowed to earn in contrast with the original version allowing all eligible employees to earn eight sick days per year.

Moreover, Flannigan's take would allow an individual to earn up to 40 hours working for businesses with fewer than 50 employees, and up to 60 hours to workers in businesses with over 50 employees. The proposal also does not guarantee that workers will be compensated with at a minimum, minimum wage, for paid sick time taken.

But whatever form the final ordinance might take, Sultan advises employers to take heed. This is particularly important given inclusion of penalties for non-compliance in both ordinance versions — $500 per violation as outlined in the original ordinance template, $250 for the first violation and $500 thereafter in the Flannigan formulation.

"One thing I'd advise employers to do is watch very carefully what council does, and watch the effective date by which they have to be in compliance," Sultan said. "It's advisable to seek counsel to draft policies and processes that are consistent with the ordinance.

Sultan earned his law license in 1996. The Gardere law firm he works for was founded in 1909. Again, the council vote is scheduled Thursday evening (Feb. 15), and a city awaits on what could be a historic move in Austin.

>>> Image via Shutterstock