Judge Halts Austin’s Sick Leave Mandate Pending Litigation

Judge Halts Austin’s Sick Leave Mandate Pending Litigation

A Texas state appeals court last week temporarily blocked a local ordinance in the capital city of Austin requiring employers to provide paid sick leave from going into effect, the Texas Tribune reported:

[T]he measure quickly drew opposition from local and state leaders, including a lawsuit filed in April by the right-leaning Texas Public Policy Foundation claiming that the city measure violates the Texas Minimum Wage Act. … The ordinance had been set to take effect Oct. 1.

“Without this stay, Austin business owners would be forced to incur significant costs implementing the requirements of the ordinance while its legality was in serious doubt,” said Robert Henneke, general counsel and litigation director for TPPF’s Center for the American Future. Texas Attorney General Ken Paxton, who has lent support to the lawsuit, also praised the news, saying the issue of minimum wage is “entrusted by the Texas Constitution solely to the Texas Legislature.”

Austin’s ordinance, which the city council passed in a 9–2 vote in February, has also faced opposition from Republicans in the state legislature, who promised at the time to pass legislation at the state level that would preempt it. Other states with conservative legislatures have taken similar measures to stop local governments from enacting liberal labor laws in the past year. Indiana banned cities from implementing “ban-the-box” laws, Missouri passed a preemption law to prevent cities like St. Louis from legislating higher minimum wages, and a Florida court found that a minimum wage increase in Miami Beach was preempted by state law.

The ruling came just one day after San Antonio passed an ordinance identical to Austin’s, even as some members of its city council predicted that the state would preempt it either legislatively or in the Texas Supreme Court. Members of the Dallas City Council have also reportedly considered a similar ordinance. Those proposals have also drawn fire from state legislators and business groups; if the lawsuit challenging Austin’s ordinance is successful, that would likely scuttle these cities’ plans as well.

Nonetheless, mandatory paid sick leave is becoming gradually more common across the United States, where 30 cities, two counties, and nine states have enacted laws requiring employers to provide this benefit. Proponents of these laws are banking on their political popularity to overcome challenges from businesses and conservative lawmakers, but they also argue that their opponents’ fears of unaffordable costs to employers are overblown. An analysis from the Institute for Women’s Policy Research projected that Austin’s mandate would end up saving local employers around $4.5 million.

Studies of sick leave mandates in other states and cities have found that they had negligible negative impacts on businesses and don’t increase unemployment as critics claim. Large companies, like Starbucks earlier this year, have also been adding or expanding sick leave policies voluntarily, whether to get ahead of potential changes in the law, in response to public or shareholder pressure, or to burnish their employer brands.