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Legal Update

Oct 17, 2019

If Pain, Yes Gain—Part 74: New San Antonio Ordinance Headlines Heatwave of Texas PSL Developments

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Seyfarth Synopsis: On October 3, 2019, the San Antonio City Council adopted an amended PSL ordinance, now known as the Sick and Safe Leave Ordinance (“SSLO”). Despite a number of key differences between the SSLO and San Antonio’s original paid sick leave ordinance, the new mandate similarly faces an uphill battle with ongoing local and statewide efforts to zap the Texas PSL bug. For the time being, the SSLO goes into effect on December 1, 2019 for all San Antonio employers.

Texas has been a focal point of America’s paid sick leave (“PSL”) growth since last year. During that time, Texas has seen three localities pass PSL ordinances, which have resulted in a number of PSL lawsuits throughout the state.

One of these localities is San Antonio. When San Antonio passed its original PSL ordinance in August 2018, it was the second lone star locality infected with PSL. A lawsuit was filed against San Antonio’s original PSL ordinance in late-July 2019 and shortly thereafter the court approved a stay of the original ordinance’s August 1, 2019 effective date and the related lawsuit.[1]  Then, earlier this month, San Antonio passed an amended PSL ordinance, the SSLO, which among other things, triggered the end of the court-approved stay in the corresponding PSL lawsuit.

While the City of San Antonio was drafting the SSLO, the Dallas PSL ordinance went into effect as scheduled despite a lawsuit to invalidate it being filed just days prior to its August 1, 2019 effective date (the lawsuit is still pending), and the Texas Supreme Court ordered briefings on the merits of the Austin PSL lawsuit be complete by December 4, 2019.

Ahead of the SSLO’s December 1, 2019 effective date, the City of San Antonio has begun an aggressive outreach campaign, which includes a revised SSLO website, updated FAQs, and eight information sessions to be held on the new ordinance in the coming weeks. While a ruling from the state Supreme Court is unlikely before the SSLO’s new effective date, a renewed preliminary injunction motion in the San Antonio PSL litigation is possible.

Although uncertainty as to their fate remains common ground for all three Texas PSL ordinances, the SSLO contains major deviations from the original San Antonio ordinance and its Austin and Dallas counterparts, and may have a major impact on employers’ compliance obligations if it goes into effect on December 1 as scheduled.

Here are some of the highlights from the SSLO as announced by the city in press releases and updated FAQs.[2]

  • Effective Date: The SSLO goes into effect for all San Antonio employers on December 1, 2019. Originally, smaller employers were to be bound as of August 2021.
    • Grace Period: The April 1, 2020 grace period during which the city will not assess penalties for violations of the SSLO apart from retaliation remains as was contemplated in the original PSL ordinance. However, the FAQs state that accrual or frontloads of PSL must begin on the SSLO’s effective date. Come April 1, 2020, it is unclear whether penalties for non-retaliation violations will be assessed based on previous occurrences or on a going forward basis only.
  • Covered Employers: The city’s press release highlights that the SSLO will apply to all employers with employees who work within city limits, regardless of size.
  • Eligible Employees: The city also announced that employees who work in the City of San Antonio are eligible under the SSLO regardless of full-time, part-time, temporary, or seasonal status, except that employees who work more than 50% of their time outside of San Antonio are covered by the SSLO if they work at least 240 hours in the city limits during the year. Previously, most employees working 80 or more hours in the city would have been eligible for PSL.
  • Accrual of PSL: From the FAQs, and consistent with the original ordinance, the SSLO will require accrual of PSL at a rate of one hour of PSL per every 30 hours worked. In contrast to the original San Antonio PSL ordinance, employers of all sizes must allow employees to accrue up to 56 hours of PSL, as opposed to original accrual cap of 64 or 48 hours depending on employer size. It is unclear whether the 56-hour accrual cap operates as an annual or point in time accrual cap at this time.
  • Start of Accrual and Usage Waiting Period: The FAQs indicate that employees accrue PSL upon commencement of employment, or for existing employees, as of December 1, 2019. They also indicate the SSLO will permit employers to enforce a PSL usage waiting period not to exceed 90 days from commencement of employment. Under the prior ordinance, employees would have been entitled to use PSL as it accrues upon commencing employment, absent an employment contract for at least a year, in which case a 60-day waiting period would have been permitted.
    • Usage Cap: The SSLO FAQs and press release do not specify whether the eight-day annual usage limitation that was contemplated by the original ordinance remains unchanged or will be different under the SSLO.
  • Frontloading and Carryover: The SSLO will permit employers to frontload 56 hours of PSL to employees at the start of each year as opposed to tracking accrual. It is expected, although not certain based on the SSLO FAQs and press release, that frontloading a sufficient amount of PSL each year allows employers to avoid year-end carryover obligations. The updated FAQs provide that an employee with less than 56 hours of PSL at year-end can carryover that amount to the following year, and again begin to accrue PSL “up to” 56 hours.
  • Reasons for Use: The city has not announced reasons for use that appear to be novel under the SSLO, despite the ordinance’s name change. The original ordinance permitted employees to use PSL for instances related to their or their family members’ status as a victim of domestic violence, sexual assault, or stalking, in addition to ordinary “sick time” purposes for themselves or their family members.
  • Covered Family Members: The FAQs suggest the SSLO will not consider individuals related by blood or whose close association with the employee is the equivalent of a family relationship to be covered family members. This would be a departure from the original mandate. Despite this apparent update, the guidance also indicates that the SSLO likely will apply to a broad range of family members, in particular: (1) spouses, domestic partners, and both different and same sex significant others; (2) any other family member within the second degree of consanguinity of affinity; (3) a member of the covered employee’s household; and (4) a minor’s parents, regardless of the sex or gender of either parent.
  • Existing PTO Policies: For employers who have PTO, vacation, or other leave policies that provide the minimum amount of paid leave, the FAQs inform they do not have to provide additional PSL under the SSLO as long as employees can use it under the qualifying conditions and circumstances indicated in the SSLO.
  • Notice to Employer: The FAQs suggest employee-friendly notice provisions under the SSLO. In particular, employees may request to use PSL at any point prior to the start of a shift or during a shift as long as they do so for protected purposes.
  • Verification of PSL Use: The FAQs also suggest the SSLO will provide employees with broad discretion in responding to an employer’s request for verification. Per the guidance, an employee can choose which documentation to provide, and such documentation could take form of a written statement indicating that “sick” or “safe” time permitted by the SSLO was used. An employer suspecting PSL abuse can request verification within the confines of federal and state law, or “other source[s].”
  • Reinstatement of PSL Upon Rehire: The FAQs confirm the SSLO will not require employers to pay out employees’ unused PSL balances upon separation from employment, but note that employers that choose not to cash out the unused time must reinstate the same amount of PSL an employee had if the employee is rehired within 6 months of separation.
  • Other Requirements: The guidance released to date does not expressly speak to employers’ notice, posting, and recordkeeping obligations, among others (e.g., rate of pay). However, the website suggests a tracking spreadsheet, handbook policy, and poster are forthcoming. An official copy of the SSLO should clarify these loose ends.

San Antonio employers should start SSLO compliance preparations now in the event it takes effect as scheduled on December 1, 2019. Here are some actions to consider:

  • Monitor the city’s website for the release of the official SSLO, further guidance, and required notices and posters.
  • Monitor judicial developments in the San Antonio and Austin PSL lawsuits.
  • Review existing sick leave policies and either implement new policies or revise existing policies, as well as any related attendance, conduct, anti-retaliation, and discipline policies.

With the paid sick leave landscape continuing to expand and grow in complexity, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with this law and sick leave requirements generally. To stay up-to-date on Paid Sick Leave developments, click here to sign up for Seyfarth’s Paid Sick Leave mailing list. Companies interested in Seyfarth’s paid sick leave laws survey should reach out to sickleave@seyfarth.com.

[1] Between August 2018 and July 2019 (i.e., the San Antonio PSL ordinance’s enactment and the subsequent legal challenge) a number of Texas PSL developments occurred, including an appellate court enjoined the Austin PSL ordinance holding it unconstitutional and the City of Austin appealed to the Texas Supreme Court, Dallas passed a PSL ordinance, and state legislative efforts to pass a PSL preemption bill failed.

[2] The City of San Antonio has not released an official copy of the SSLO at the time of this publication, but has announced certain aspects of the SSLO through the publication of updated FAQs and a press release regarding the SSLO information sessions. Such guidance is non-binding and only indicative of the SSLO’s requirements. We will provide any needed updates to this summary once the official copy of the SSLO is released.