06 March 2018

City of Austin Texas passes paid sick leave ordinance

The Austin, Texas city council recently passed an ordinance that, effective October 1, 2018, will require employers operating in the city to provide paid sick leave to their employees. Mayor Steve Adler is expected to sign the ordinance into law.

The Mayor has stated that Austin will be first city in the South to mandate paid sick leave.

Effective October 1, 2018, private employers must provide a minimum of 64 hours (eight days) of paid sick leave a year to their employees by allowing them to accrue one hour of sick leave for every 30 hours worked. Eligible employees are those who perform at least 80 hours of work within the city within a calendar year.

Earned sick leave must begin accruing as of the effective date of the ordinance or upon hiring, whichever occurs later. Earned sick leave must be available to employees as soon as it is accrued. An employer is required to allow employees to carryover unused earned sick time of up to 64 hours to the next calendar year. An employer must reinstate a separated employee's earned/unused leave if the employee returns to work after a separation of not more than 12 months.

On no less than a monthly basis, employers will be required to provide a statement to employees showing the amount of available earned sick time. The statement may be given on paper or electronically.

Ernst & Young LLP insights

Austin is the first city in Texas to pass a paid sick leave ordinance. It's been reported that certain Texas state legislators have vowed to pass legislation that would preempt Austin and other Texas cities/localities from enforcing the paid sick leave ordinance. However, because the state legislature does not reconvene again until 2019, the ordinance will be in effect for several months before preemption legislation could be passed (unless the governor calls the legislature into special session).

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Advisory Services — Employment Tax Advisory
Debera Salam (debera.salam@ey.com)
Kristie Lowery (kristie.lowery@ey.com)
Kenneth Hausser (kenneth.hausser@ey.com)
Debbie Spyker (deborah.spyker@ey.com)

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EY Payroll News Flash

Document ID: 2018-0505