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A three-judge panel found the city ordinance essentially regulated workers’ wages, which Texas law mandates can only be done by the state.
A state appellate court Friday struck down Austin’s ordinance requiring private employers to give employees paid sick leave, saying it violates Texas’ constitution and the state’s minimum wage law.
The sick-leave law approved in February was the first passed in Texas, but San Antonio also passed one in August even though it was clear it would face challenges both in court and when the Texas legislature convenes next year.
Proponents in both places argued that being forced to take time off without compensation because of an illness can be financially devastating for a low-income family. Twenty-nine percent of private sector workers didn’t have paid sick leave benefits as of March 2018, according to the Bureau of Labor Statistics, and lower-income workers in particular were less likely to get paid leave. Of employees with wages in the lowest 10 percent, only 31 percent had access to paid sick days.
The Austin mandate was estimated to cover 87,000 workers, with advocates saying it would actually save businesses money by stopping the spread of illnesses throughout a workforce.
“This is about widening inequality and fighting against it," Austin City Council Member Greg Casar, who sponsored the measure, was quoted as saying in the Texas Observer when the ordinance passed.
But business advocates were skeptical, filing a lawsuit that was eventually joined by the state. During debate about the proposal, some small business owners said they just couldn’t afford to pay their employees for days they needed to take off when sick. Hoover Alexander, who owns the restaurant Hoover’s Cooking, told the Austin American-Statesman, “It is not due to my lack of want, it is a question of can I afford to do it.”
Eleven states have imposed paid sick leave requirements, along with 17 other cities and three counties, according to the National Partnership for Women and Families.
The Austin ordinance, which was the first in a southern city and originally set to go into effect in October, would have allowed employees to accrue one hour of paid sick leave for every 30 hours worked, with the ability to accumulate up to eight days a year of leave. Smaller businesses would have to provide up to six days a year sick leave.
In a decision by Chief Justice Jeff Rose, a panel of the Austin-based 3rd Circuit Court of Appeals agreed with business groups that the ordinance essentially gave workers a wage hike, which is prohibited by a state law that bans cities from imposing their own minimum wage standards. Austin had argued that the requirement wasn’t in violation of state law, saying the court should consider the paid leave mandate as a fringe benefit.
In a tweet, Casar vowed to appeal, while noting that two of the three justices who signed onto the decision—David Puryear and Scott Field—had lost their seats in the November election.
“I’m confident the next court in this ongoing process will rule with the law and common sense: guaranteeing paid sick days is legal & good for Texans,” he wrote.
A city spokesperson said in a statement that they will be “reviewing our options in this case.”
“Ensuring workers are able to take time off work when they are sick is simply the right and responsible thing to do, as many cities have already acknowledged,” the statement said.
Editor's Note: This story was updated after publication.
Laura Maggi is the Managing Editor of Route Fifty and is based in Washington, D.C.
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