The Battle over Paid Sick Leave in Texas Continues



Several Texas cities recently enacted paid-leave laws, but local lawmakers have hit a serious roadblock: State law might pre-empt these mandates.

Laws in Dallas and Austin require employers to provide six to eight paid sick days a year, depending on employer size. San Antonio's law allows employees to accrue up to 64 paid hours per year.

However, on Nov. 16, 2018, a state appellate court temporarily halted Austin's paid-sick-leave ordinance. In Texas Association of Business v. City of Austin, Texas, the court said that the Texas Minimum Wage Act pre-empts the city's ordinance. The act states that "the minimum wage provided by [the act] supersedes a wage established in an ordinance ... governing wages in private employment."

[SHRM members-only state coverage: Texas Employment Law]

The city of Austin has asked the Texas Supreme Court to review the decision. The petition argues that the plaintiffs did not meet the legal standard for a preliminary injunction and that the appellate court's ruling on the merits of the pre-emption claim was premature.

"It will likely be some time still before we see a ruling from the Supreme Court," said Katrin Schatz, an attorney with Jackson Lewis in Dallas. "Whether that ruling will address the pre-emption issue on its merits is unclear given the petition's focus on other threshold questions related to temporary injunction proceedings."

Legislation Stalled

In addition to the judicial development, the Republican-controlled Texas Legislature has tried to prohibit such local paid-sick-leave laws and Gov. Greg Abbott has come out against local paid-sick-leave measures on the grounds that they are bad for business—especially for small businesses.

On April 11, the Texas Senate passed SB 2487, which would make it unlawful for local governments to adopt or enforce an ordinance mandating a private employer's terms of employment relating to any form of employment leave, including paid sick leave. However, the bill did not make it through the Texas Legislature before the governing body ended its 2019 session on May 27.

Business groups will have to wait a while before they see any additional action on the issue from legislators, as the Texas Legislature meets every other year. So the next legislative session doesn't begin until January 2021.

What's Next?

Although the Austin ordinance was challenged, no legal action has been taken to halt the Dallas or San Antonio ordinances, which are scheduled to take effect on Aug. 1. "Unless the Austin judicial challenge succeeds, employers will not see any relief from these local laws in the near future," said Linda Schoonmaker, an attorney with Seyfarth Shaw in Houston.

So far, only one state appellate court has said that Texas law pre-empts local leave laws. Since there is no legislation that explicitly prohibits local paid-sick-leave laws and a state Supreme Court ruling in the Austin case could take some time, the San Antonio and Dallas ordinances may well go into effect as scheduled, Schatz noted. This is a development that many employers are not currently prepared for, she said.

Bryant Banes, an attorney with Neel Hooper & Banes in Houston, thinks local governments will move to place such measures on the ballot to put more pressure on the Legislature to take action.

"As in all things political, if there is voter outcry, there may be a legislative compromise to grant some lesser relief that perhaps excludes small businesses from such mandates," he said.