Austin’s Third Court of Appeals Holds Austin’s Paid Sick Leave Ordinance Unconstitutional

Austin’s paid sick leave ordinance, which was supposed to go into effect this past October, has been held unconstitutional by the Third Court of Appeals in Austin. The court of appeals held that the ordinance establishes a “wage” and, as such, it is preempted by Texas Minimum Wage Act. The Texas Minimum Wage Act specifically precludes municipalities from regulating the wages paid by employers who are subject to the Fair Labor Standards Act (FLSA) and specifically provides that the Texas Minimum Wage Act supersedes a “wage” established in an ordinance governing wages in private employment. The court of appeals remanded the case back to the district court, instructing the lower court to grant the State’s application for temporary injunction and for further proceedings consistent with its ruling.

This decision is welcomed news to the opponents of San Antonio’s paid sick leave ordinance, which is set to go into effect on August 1, 2019. Of course, the challenges to San Antonio’s ordinance will be heard by a different court of appeals, which could result in a different outcome. Those legal challenges may be made moot, however, because the Texas legislature has already begun taking action to prohibit paid sick leave ordinances across the state. House Bill 222, which was pre-filed prior to the start of the next Legislative session, which begins on January 8, 2019, would prohibit municipalities from adopting or enforcing any ordinance mandating paid sick leave. We expect additional, similar bills to be proposed by various lawmakers as the Legislative session progresses.

If you have any questions about this ruling or other labor or employment issues, please feel free to contact the author of this Alert, Rachel Z. Ullrichrullrich@fordharrison.com, counsel in our Dallas office. Of course, you may also contact the FordHarrison attorney with whom you usually work.

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