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By Sanjeev Kumar
Founding Attorney

Does Austin’s sick leave law violate the Texas Minimum Wage Act?

Recently, Austin passed a new ordinance that would require most private businesses in the city to provide employees with 64 hours of paid sick leave. The law is slated to start on October 1st, but now it is facing a legal challenge from a coalition of Texas businesses. The group seeks to overturn the bill by claiming it violates the state’s minimum wage act. Our Austin, Texas business law lawyers explore Austin’s new sick leave policy and the recent challenge to its legality.

Austin’s Sick Leave Act

Austin’s new ordinance requires that private employers with 15 or more employees provide employees with 64 hours of paid sick leave per year. Smaller businesses must give employees 48 hours of paid sick leave annually. The ordinance was approved by a 9-2 vote back in February.

The ordinance is intended to protect the legitimate health and safety needs of employees. Employees nationwide are often forced to go to work while sick out of fear of losing their jobs. Now, in Austin, employees will be entitled to additional legal protections which could improve their quality of life.

Some small business owners across Austin, however, are an afraid passage of the ordinance may negatively impact their business. A coalition of businesses against the ordinance include the Texas Association of Business and the National Federation of Independent Business. These groups are seeking an injunction against Austin’s enforcement of the ordinance.

Among their arguments in opposition to the ordinance, these Texas business organizations urge that the sick leave law violates the Texas Minimum Wage Act. The law, they claim, prevents localities from requiring private employers to pay above the federal minimum wage. Should the law go into effect, according to the lawsuit, it will increase the minimum wage because sick leave is a form of wages.

For now, employers in Austin will want to closely follow the status of Austin’s sick leave ordinance. Employers should plan to implement the law come October, as it currently stands to take effect. Employers will need to first determine whether they fall under the small or regular employer category. Next, employers will want to update employee handbooks and plan on how they may adapt to employees potentially taking more paid sick leave. Contact us for more information about business law.

About the Author
Sanjeev Kumar is the founder and principal at the Kumar Law Firm, which provides a wide range of legal services to entrepreneurs and business owners in the area of business & corporate law and intellectual property along with related areas of interest to clients such as business succession planning, wealth preservation through estate planning, and alternate dispute resolution.