SHRM Supports Challenge to Austin’s Paid-Sick-Leave Law

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The Society for Human Resource Management (SHRM) supports a lawsuit challenging a paid-sick-leave law in Austin, Texas, that is slated to take effect for many businesses on Oct. 1.

The new law would require an employer to provide paid-sick-leave benefits to employees who work 80 or more hours in Austin in a calendar year for that employer. Employees will accrue one hour of sick leave for every 30 hours worked in the city. Accruals are subject to certain caps depending on employer size, and businesses with five or fewer employees will have an additional two years to comply.

Austin is just one of many cities and states in the country that have passed or are considering passing paid-sick-leave laws. SHRM continues to oppose these "rigid" sick-leave mandates "because they limit employer flexibility and innovation in designing paid-leave offerings that best meet employee needs," said Lisa Horn, SHRM's director of congressional affairs.

"The solution here is not another sick-leave mandate—we need a nationwide solution that works for both employers and employees," said Johnny C. Taylor, Jr., SHRM-SCP, president and chief executive officer of SHRM. 

SHRM has identified a nationwide solution. The Society worked with Rep. Mimi Walters, R-Calif., to develop the Workflex in the 21st Century Act (H.R. 4219), which would simplify paid-leave options and offer generous paid leave and increased flexible work arrangements to employees.

"Rather than more mandates, H.R. 4219 delivers paid-leave and workflex options in a way that works for both employers and employees," Horn said.

Violation of Texas Law Alleged

The Texas Association of Business is the lead plaintiff in the lawsuit against Austin and is joined by several other business groups. The groups contend that the city's ordinance violates the Texas Minimum Wage Act, which bars municipalities from regulating private-sector employees' wages.

The state wage law incorporates the federal Fair Labor Standards Act but prohibits municipal ordinances from going beyond those state and federal standards.

Austin's paid-sick-leave ordinance violates Texas law by requiring employers to pay at least minimum wage for hours that employees don't actually work, the complaint asserts.

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

The city's ordinance is pre-empted by the Texas Minimum Wage Act, and Austin lacks evidence to show any legitimate governmental interest that would support imposing this regulatory burden on all business owners, said Robert Henneke, general counsel and director of the Center for the American Future at the Texas Public Policy Foundation, which is another plaintiff in the case.

The plaintiffs have asked the court for a declaratory judgment stating that the city's law is pre-empted by state law, a temporary injunction preventing it from taking effect, and ultimately, a permanent injunction barring the ordinance.

The bill's supporters say that Austin's paid-sick-leave ordinance guarantees that employees will be able to care for themselves and family members. 

The law helps ensure that workers are treated with respect and dignity, said Amanda Cavazos Weems, president of Young Active Labor Leaders in Austin.

"After months of building a movement for paid sick days, I'm so proud of the efforts of our community to achieve this historic policy victory," said Austin council member Greg Casar, the ordinance's sponsor.

But Jeff Moseley, chief executive officer of the Texas Association of Business, said, "Austin and Texas business leaders know how to run their businesses and can do so more productively without overreaching regulations that stifle the economy and cost jobs."

 

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