06 December 2018 Texas district court rules Austin's paid sick leave ordinance unconstitutional The Texas Third Court of Appeals ruled that Austin's paid sick leave ordinance that took effect October 1, 2018, is unconstitutional, finding that the ordinance is preempted by the Texas Minimum Wage Act (TMWA). (Case 03-18-00445-CV.) The ordinance required Austin employers to allow eligible employees to accrue one hour of sick leave for every 30 hours worked, up to a minimum of 64 hours of paid sick leave per year. Eligible employees were those who perform at least 80 hours of work within the city within a calendar year. (See EY Payroll Newsflash Vol. 19, #059 (3-6-2018.) "We hold that the Texas Minimum Wage Act preempts local regulations that establish a wage, that the Ordinance establishes a wage, and that, accordingly, the TMWA preempts the City's Ordinance as a matter of law, thus making the Ordinance unconstitutional." The city?has until December 12, 2018 to appeal the court's decision. However, pre-filed legislation (HB 222) waiting for the start of the 2019 legislative session may make any further arguments moot. As we've reported previously, state legislators have vowed to pass legislation in 2019 to preempt localities from enacting legislation that establishes a paid sick leave law. The bill, if passed as expected, would preempt any municipality's ordinance, rule, or regulation adopted before, on, or after the effective date of the bill. The 2019 legislative session begins January 8, 2019. San Antonio, Texas in August became the second Texas city to pass a paid sick leave ordinance this year (EY Payroll Newsflash Vol. 19, #145, 9-13-2018). San Antonio's ordinance provides for an effective date of August 1, 2019. Although the decision made by the Third Court of Appeals does not directly affect San Antonio's ordinance, the state and several business groups are expected to use the Austin ruling to challenge San Antonio's law.
Document ID: 2018-2420 | |||||||||
