Dallas and San Antonio Paid Sick Leave Starts Accumulating on August 1st
This past legislative session, the Texas Legislature failed to pass laws preempting paid sick leave ordinances that were passed by municipalities. While a similar ordinance in Austin was ruled unconstitutional by the Court of Appeals – and also enjoined from being implemented – no such legal actions have been filed with regards to the ordinances in Dallas and San Antonio. While it is likely that litigation will still be filed up until the August 1st implementation date, the lack of any such suits leaves employers with no choice but to prepare accordingly. Therefore, Dallas and San Antonio employers (and even companies based elsewhere with employees in those cities) should review their current leave policies to make sure that leave accumulation and utilization is handled correctly starting on August 1, 2019 (August 1, 2021 for small employers with less than five employees.)
Under the ordinances, private employers must give workers – including to part-time employees – one hour of paid sick leave for every 30 hours worked with accrual capped at 64 hours per year, or 48 hours for employers with less than 15 employees. Sick leave will begin accruing at the commencement of employment or when the ordinances take effect, whichever is later. Employees are eligible for paid sick leave under these ordinances if they work 80 or more hours in a year within the Dallas or San Antonio city limits. All available earned sick leave, up to the yearly cap, must be carried over to the next year. However, employers who choose to frontload the maximum 64 or 48 hours of earned paid sick leave, whichever is applicable, to employees at the beginning of the year are not required to track accrual or permit year-end carryover of unused time. Additionally, employers are not required to allow employees to use more than eight earned paid sick days in one year.
Employees may use earned sick leave for:
- Physical or mental illness or injury, preventive medical or health care or a health condition of the employee or a family member (under the ordinances, family member means an employee’s “spouse, child, parent, any other individual related by blood, or any other individual whose close associate to an employee is the equivalent of a family relationship.”); and
- To seek medical attention, seek relocation, obtain services of a victim services organization or participate in legal or court-ordered action related to an incident of victimization from domestic abuse, sexual assault or stalking involving the employee or employee's family member.
Employees covered by the ordinances seeking to use earned paid sick leave must provide a "timely request" for its use before their scheduled work time. However, employers cannot prevent an employee’s use of paid sick leave for unforeseen absences that otherwise meet the sick leave requirements. Employers may verify the reason for the absence once an employee is absent for more than three consecutive work days, but even then, the employer cannot inquire as to specifics (e.g., the type of health condition at issue or the nature of the domestic abuse). Employers must compensate employees using accrued sick leave by paying the same compensation that employees would have received if they had worked their scheduled hours "exclusive of any overtime premium, tips, or commissions," but no less than the state minimum wage.
- Employers must maintain records establishing the amount of earned sick leave accrued and used by each covered employee;
- Employers are required to provide employees with an electronic or written statement showing their available earned paid sick leave on at least a monthly basis (i.e. on a pay stub);
- Employers must provide a notice of employees’ rights in employee handbooks; and
- Employers must display signs describing the ordinance in conspicuous places where notices to employees are customarily posted.
Employers will want to review their existing leave policies to ensure they are compliant with the new ordinances. For employers that already have paid time off policies, the law does not mandate any additional leave so long as the employer’s policy complies with the ordinances’ provisions regarding accrual, the yearly cap and leave use. For example, a PTO policy that does not distinguish between vacation leave and sick leave and provides a set amount of PTO for use, regardless of the reason, is still permissible so long as it complies with the ordinances’ provisions regarding accrual, yearly caps and leave use.
Penalties will not be assessed against employers for violation of the ordinances prior to April 1, 2020, except for violations of the ordinances’ anti-retaliation provisions. After that, a civil penalty in an amount not to exceed $500 per violation may be assessed after first requesting voluntary compliance, and also subject to appeal by the employer.
Executive Order on Health Costs to Affect Employer Health Plans
On June 27, 2019, President Donald Trump signed an executive order aimed at improving price and quality transparency in health care. The order is intended to increase availability of health care price and quality information and protect patients from surprise medical bills.
The order directs federal agencies to issue guidance in a number of areas regarding health care costs. Part of the order is intended to expand access to high-deductible health plans (HDHPs) and flexible spending accounts (FSAs) and to more broadly define eligible medical expenses under Internal Revenue Code (Code) Section 213(d).
The goal of the executive order is to enhance the ability of patients to choose the health care that is best for them by increasing access to information regarding price and quality of health care goods and services. Specifically, the order is aimed at:
- Eliminating unnecessary barriers to price and quality transparency;
- Increasing the availability of meaningful price and quality information for patients;
- Enhancing patients' control over their own health care resources, including through tax-preferred medical accounts; and
- Protecting patients from surprise medical bills.
The order includes directives that will affect certain health plans that are provided by employers.
Specifically, within 120 days, the order directs the Treasury to issue guidance to expand access to HDHPs that can be used alongside a health savings account (HSA) and that cover low-cost preventive care, before the deductible, for medical care that helps maintain health status for individuals with chronic conditions.
In addition, the order directs the Treasury to propose regulations within 180 days to:
- Treat expenses related to certain types of arrangements – potentially including direct primary care arrangements – as eligible medical expenses; and
- Increase the amount of funds that can carry over without penalty at the end of the year for FSAs.
An executive order is a broad policy directive used to establish how laws will be enforced by the administration. The order does not make any changes to existing regulations, but directs federal agencies to issue new guidance to implement the order’s policies. As a result, the executive order’s specific impact will remain largely unclear until agencies can issue further guidance.
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