Dallas Paid Sick Leave Ordinance – What You Need to Know

Update:

On July 30, 2019, two Dallas-area businesses filed a federal lawsuit to stop the Dallas Paid Sick Leave ordinance from going into effect on August 1. The lawsuit, brought by the Texas Public Policy Foundation on behalf of ESI/Employee Solutions, LP and Hagan Law Group LLC, argues the ordinance oversteps and is contrary to the Texas Constitution and the state’s minimum wage act. The lawsuit specifically asks for an injunction to stop the ordinance from going into effect. However, unless and until the court enters a preliminary injunction, the ordinance is still set to go into effect on August 1. We are closely monitoring these developments, and will provide an update when we have additional information.

Meanwhile, the City of Dallas has now provided a FAQ page (link HERE), that provides useful information on geographic limitations of the ordinance as well as answers to important questions regarding practical application of the new rules, using hypothetical scenarios from different employment arrangements and industries.

For those interested in whether their business is subject to the new ordinance, here is a link  to a searchable map of the boundaries of the City of Dallas, broken into its various districts (note that the city boundaries do not necessarily correspond with Zip Codes, and do not include the municipalities of University Park, Highland Park, or Cockrell Hill).

The Dallas City Council recently joined several other major Texas cities in passing a mandatory paid sick leave ordinance. The new rules (found in Chapter 20 of the Dallas City Code, and summarized in this memorandum from the City) are set to go into effect on August 1, 2019, for employers with 6 or more employees, and on August 1, 2021, for those with 5 or fewer employees. Although Dallas employers are encouraged to closely review the new rules and format internal policies accordingly, here is what you need to know to start that process:

• The rules define “employee” as “an individual who performs at least 80 hours of work for pay within the City of Dallas, Texas in a year for an employer, including work performed through the services of a temporary or employment agency.” Sec. 20-2.
• Beginning August 1, 2019, employers with 6 or more employees in the trailing 12 month period must provide for 1 hour of paid sick leave for every 30 hours worked (but employers with a written policy establishing the accrual in fractions of an hour can provide paid sick leave in fractional increments). Sec. 20-4.
• Beginning August 1, 2021, Employers of 5 or fewer employees must comply with the ordinance. Sec. 20-4.
• Employers with 16 or more employees must allow employees to accrue and carry over a minimum of 64 hours of unused paid sick leave. Those with 15 or fewer employees must provide for a minimum of 48 hours’ accrual / carry over. Sec. 20-4.
• Employers must conspicuously display a sign describing the requirements of the ordinance and, if they provide an employee handbook, include a notice of the employee’s rights and remedies under the ordinance therein.  Sec. 20-7.
• Employers must maintain records establishing the amount of earned paid sick time accrued by, used by, and available to each employee, and provide them with monthly statements of available paid sick leave. Sec. 20-7.
• The ordinance prohibits retaliation against employees who opt to use paid sick leave, report violations of the ordinance, or exercise any right provided for therein. Sec. 20-8.
• Violations of the ordinance are punishable by a civil fine up to $500, per violation (although the rules provide that no penalties other than those for retaliation under Section 20-8, will be assessed until April 1, 2020). Sec. 20-11.

The City Council held two question-and-answer sessions on July 9^th and 10^th, during which many business owners voiced concern over the ambiguity of the ordinance and the unknown consequences for their businesses. At the July 10, 2019 session, City representatives noted that the City’s Office of Fair Housing and Human Rights, which is tasked with administrative enforcement of the ordinance, had not yet finished its rulemaking despite the rapidly approaching effective date. Amid the attendees’ frustration at the lack of clarity provided in the new ordinance, the City promised a set of administrative rules in the following weeks that will hopefully provide much-needed guidance.

As previously reported on Cozen O’Connor’s HR Headaches Blog, Austin attempted to implement a similar ordinance in 2018, but it is currently on hold as an appeals court said it is unconstitutional. San Antonio similarly has a new paid sick leave ordinance that is set into effect on August 1, 2019. In the 2019 session, the Texas legislature considered a bill that would have banned city ordinances mandating paid sick leave, but it failed to pass.

Cozen O’Connor is closely monitoring this developing matter. Be sure to check in with HR Headaches for updates and guidance, as it becomes available.