Dallas Paid Sick Leave Ordinance

City of Dallas Paid Sick Leave Ordinance

Dallas Paid Sick Leave Ordinance
The Dallas Paid Sick Time Ordinance has been challenged in federal court

Chapter 20 of the Dallas City Code entitled Earned Paid Sick Time went into effect August 1, 2019. The provision requires employers to provide paid sick leave to workers. It applies to any private business (governmental employers are exempt) that employs at least one person either full or part time at a minimum of eighty hours a year within the Dallas city limits.

Overview of the Ordinance

The ordinance calculates the accrual of paid leave time at the rate of one hour for every thirty hours worked. An employee can use this accrued hour for illness, injury, preventive medical or healthcare, or health condition. This also extends to the care of a family member’s physical or mental illness. Time off for relating to being the victim of a criminal attack that resulted in injury or illness also qualifies. However, an employer may not inquire as to the nature of the circumstances for employees taking time off for this purpose.

If an employer has sixteen or more employees, an employee may accrue up to sixty-four hours in paid leave time. For employers with fifteen or fewer employees, this total is reduced to forty-eight hours, and for employers with five or fewer employees, this ordinance does not go into effect for two more years.

Employers operating a fiscal year other than a calendar year must provide each employee with written notice of such policy by August 1, 2019, and thereafter at the commencement of employment. Employers are required to maintain records of the accrued paid sick time used and/or available to each employee.

The ordinance also affects bookkeeping and HR departments. It requires that each employee receive a monthly written or electronic statement showing the amount of the employee’s available earned paid sick time. If an employer issues an employee handbook, it must be amended to include a notice of an employee’s rights and remedies under this ordinance.

Fines for violating the ordinance for non-compliance will not be levied until April 1st, 2020, and per the City of Dallas Chief of Equality and Inclusion, the City will seek “voluntary compliance with the ordinance before seeking payment of a fine.” Civil fines can range up to five hundred dollars per violation.

Lawsuits and Injunctions

Similar ordinances passed by the cities of San Antonio and Austin have been challenged by lawsuits. This litigation has resulted in the City of San Antonio delaying implementation of its program until December 1, 2019. However, the city’s concession did not dispose of the case.

Austin’s paid sick and safe leave law ordinance is subject to a temporary injunction, suspending enforcement of the ordinance. The Austin Court of Appeals has found the ordinance to be unconstitutional. The lawsuit is expected to be resolved in the Supreme Court of Texas.

As of the date of this article (August 15, 2019), the status of Dallas’s ordinance is unclear. The State of Texas, joined by a staffing agency and a law firm, has filed suit in the federal court in Sherman, Texas, to challenge the ordinance. The situation is unresolved and changing week by week, but until the court enters a temporary injunction suspending the Dallas ordinance, it remains in effect.

Employers and employees are urged to contact counsel for legal advice concerning status and enforcement of the ordinance. This article is intended as an overview only, and is not a full legal analysis.


Henry Wehrmann | Farrow-GIllespie & Heath LLP

Henry S. Wehrmann practices in the primary areas of employment litigation defense, trade secrets and other intellectual property litigation, personal injury litigation defense, and products liability litigation defense. He is Board Certified in Personal Injury Trial Law by the Texas Board of Legal Specialization and is a former chair of the Sports & Entertainment Law section of the Dallas Bar Association.

New DOL Rule Suspended

A federal court in Texas has ruled that there is a substantial likelihood that a proposed new DOL rule that increases the threshold salary for exempt employees violates the law. Earlier this year, the Department of Labor published new rules, one of which raised the threshold salary for exempt employees from $23,660 to $47,476. The Texas court issued an injunction preventing the new overtime rules from going into effect. The rules were to have taken effect on December 1 of this year. The DOL likely will appeal the ruling to the Fifth Circuit Court of Appeals, and the issue may go all the way to the Supreme Court. But for now, implementation of the new salary threshold rule for exempt employees is on hold. The decision, along with a new administration, makes it unclear whether and when the new rules will take effect. How should employers respond to the ruling?

  • Nothing in the injunction prevents you from moving forward and changing compensation plans for some employees—raising some salaries or converting them to hourly nonexempt status.
  • If you want to hold off on increasing an exempt employee’s salary but keep him or her in an exempt status, you can. Right now, the injunction leaves in place the old salary basis test. If the injunction is lifted, you may have to implement some changes quickly—so you will need to pay attention to the legal news.
  • If you want to change some of your formerly exempt folks to nonexempt hourly status, you can. Paying someone on an hourly basis is always okay as long as you pay required overtime.

New overtime rules

Julie Heath | Farrow-Gillespie & Heath LLPThe U.S. Department of Labor has published historic changes to the overtime rules that will make approximately 4.2 million currently exempt employees eligible for overtime pay. The new rule increases the salary threshold for employees who are exempt (not eligible to receive overtime) from $23,660 to $47,476. To comply with the new regulations, employers either must increase an exempt worker’s salary to $47,476 so the worker remains exempt, or must reclassify him or her as nonexempt, and thus make the worker eligible to receive overtime.

All employers will have to comply with the changes made to the overtime regulations by December 1, 2016.

 

Farrow-Gillespie & Heath LLP | Dallas, TX

Independent contractor status under scrutiny

The Department of Labor has clamped down on its definition of “independent contractor,” declaring that most workers are “employees” under the law. Last month, the DOL issued its Administrator’s Interpretation No. 2015-1, analyzing the FLSA’s “economic realities” test used to determine whether a worker is an employee or independent contractor.

According to the DOL, misclassification of employees as independent contractors is a massive and growing problem. According to the DOL, certain benefits such as FMLA leave, minimum wage, overtime pay, unemployment insurance, and workers’ compensation are being wrongfully denied. The Administrative Interpretation, which runs 15 pages in length, opens the door for lawsuits brought by contractors who feel they should be classified as employees under the law. For employers, not only is payment of benefits at issue, but also payment of payroll taxes to the IRS.

The legal test to determine employment status weighs the following factors: (1) the extent to which the work performed is an integral part of the employer’s business; (2) the worker’s opportunity for profit or loss depending on his or her managerial skill; (3) the extent of the relative investments of the employer and the worker; (4) whether the work performed requires special skills and initiative; (5) the permanency of the relationship; and (6) the degree of control exercised or retained by the employer.

No single factor is determinative in analyzing the employment relationship, the DOL says. Employers should take a new look at their independent contractor positions to ensure that workers are properly classified.

Farrow-Gillespie & Heath LLP | Employment Law

Exempt employee definitions may change

Under the Fair Labor Standards Act (FLSA), employees who are “exempt” are not eligible for overtime payments. Employers are not required to pay overtime to an exempt employee, regardless of the number of hours the employee works.  Numerous categories of exempt employees exist, but three of the primary categories include employees in professional, executive, or administrative roles.

Under current FLSA regulations, an employee need make only a salary of $23,660 per year ($455 per week) to be eligible for exempt status under the professional, executive, or administrative categories.

This week, the Department of Labor proposed new regulations that would more than double this minimum salary requirement to $50,440 per year ($970 per week), thus radically decreasing the number of employees who would qualify to be exempt from overtime. The actual changes may be months away, and will not be implemented until the conclusion of a “comments” period. However, employers should pay careful attention to these proposed changes because they may necessitate a significant change in overtime policies and payments.