Paid Sick Leave Laws: A Headache for Multi-Jurisdiction Employers

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2019 Issue Three

Paid Sick Leave Laws: A Headache for Multi-Jurisdiction Employers

By: Maria Garrett

Employees get sick. Employers understand that. Currently, federal law does not require private employers to provide paid sick leave. However, many employers nonetheless create voluntary policies that allow employees to take paid time off to manage their health. According to the Bureau of Labor Statistics, 71 percent of workers in private industry had paid sick leave benefits in 2018.

In recent years, states and local governments have taken it upon themselves to mandate paid sick leave coverage for private employees. As of October 2019, 13 states, the District of Columbia, and Puerto Rico have enacted statewide laws requiring private employers to provide paid sick leave. More than 30 local jurisdictions (cities, counties, etc.) across the country have passed paid sick leave laws. These local laws are either more generous than those of their respective state or are in locations without a statewide law.

The problem is most of these laws contain different requirements for eligibility, accrual, use, and other key provisions. The resulting patchwork of conflicting laws leaves even employers with the most generous of sick leave policies facing compliance issues. Multi-jurisdiction employers are now realizing that their previous one-size-fits-all-offices approach to leave policies may no longer work or may require policy revisions to provide more generous leave.

For example, many employers provide sick leave benefits to full-time employees but not part-time employees. Most paid sick time laws, however, define eligibility a lot more broadly and encompass part-time workers. Another difference is some of these laws apply only to the traditional “sick” leave, while others—for example Oregon and New York City—also require “safe” time for targets of domestic violence, sexual assault, or stalking. In addition, the accrual rate varies by law. For instance, some laws require sick leave to accrue at a rate of one hour for every 30 hours worked. Others may have a rate of one hour of paid sick leave for every 35 hours worked.

So, employers are now asking themselves, “How do we make sure we are in compliance with the law of every jurisdiction in which we are located?” The answer can be different for each employer. Some employers, particularly those with fewer locations, may be able to create one overarching policy that is generous enough to comply with every law. Most sick leave laws today contain safe harbor provisions that allow current policies to stand even if they do not include every provision of the law, as long as the accrual rate and terms of use are equivalent or greater than what is required under that law. But, as more jurisdictions pass different laws—as employers with many offices are already learning—it will become increasingly difficult to create universal policies.

Paid sick leave laws have slowly started to infiltrate Texas. Although Texas has not joined the states that have passed statewide laws, three major Texas cities have passed citywide ordinances. Austin was the first to pass such a law, which was to become effective October 1, 2018. Before its effective date, the state attorney general’s office and several business groups filed a lawsuit challenging the constitutionality of the law. The Austin Court of Appeals held the Texas Minimum Wage Act preempted the ordinance. The Supreme Court of Texas is currently reviewing this decision. The law is blocked from taking effect while it is reviewed.

San Antonio and Dallas enacted city ordinances similar to the one challenged in Austin. Under these laws, all employers with more than 15 employees would have to provide employees with up to 64 hours (eight days) of paid sick leave per year, which must accrue at a rate of one hour per every 30 hours worked in the respective city. Both laws apply to part-time, full-time, exempt, and non-exempt employees.

Both the Dallas and San Antonio laws were set to take effect August 1, 2019. However, both have since been challenged in court. Once its ordinance was challenged, San Antonio agreed to delay the effective date to December, but the Dallas law went into effect before the Dallas lawsuit (in Sherman federal court) was filed. Therefore, the Dallas ordinance is technically in effect, although neither it nor the San Antonio law provide for penalties until April 1, 2020. Of course, because of their similarities, all Texas-city laws are likely to suffer the same fate if the Supreme Court of Texas affirms the holding of the Austin Court of Appeals (which held the Austin law unconstitutional).
The law is rapidly changing in this area and employers should keep a close eye on the ever-changing legal landscape. It is critical for multi-jurisdiction employers to audit their sick leave policies and coordinate with employment counsel to ensure compliance with the laws of every jurisdiction in which they operate.