If Pain, Yes Gain — Part 81: Dallas Employers Get Ready–Full Paid Sick Leave Enforcement Begins April 1!!

Seyfarth Synopsis:  Last April, the Dallas City Council passed an ordinance requiring employers to provide employees who work within the City of Dallas with 48 or 64 hours of paid sick leave per year, depending on size.  Despite pending lawsuits challenging the legality of the ordinance, the ordinance took effect August 1, 2019. Since that time, the City of Dallas has limited its enforcement to violations that constitute unlawful retaliation. On April 1, 2020, full enforcement will begin. 

As enforcement draws near, employers should take a close look at the ordinance, regulations and administrative guidance and their respective policies to ensure compliance, to the extent they have not already done so.  This article provides a recap of the paid sick leave requirements in Dallas and outlines the penalties facing employers who do not comply.

Effective August 1, 2019, pursuant to Dallas’ Earned Paid Sick Time ordinance (the “Dallas Sick Time Ordinance”), employers with more than five employees at any time in the preceding 12 months are required to provide their employees with paid sick leave.  Businesses with five or fewer employees in the preceding 12 months have until August 2021 to comply.

Below is a summary of the Dallas Sick Time Ordinance:

• Definition of Covered Employees: Eligible employees include individuals who perform at least 80 hours of work for pay in Dallas in a year for an employer, including work performed through the services of a temporary employment agency. The Dallas Sick Time Ordinance, however, excludes independent contractors, as defined by the Texas Administrative Code, and unpaid interns from the definition of employee.
• Definition of Covered Employers: Employers are defined broadly to include any person, company, corporation, firm, partnership labor organization, non-profit organization, or association that pays an employee to perform work for an employer and exercises control over the employee’s wages, hours, and working conditions. Covered employers do not include the United States, State of Texas, and City of Dallas governments and any agency that cannot be regulated by city ordinance.
• Accrual Rate and Cap: Employees accrue one hour of earned paid sick time for every 30 hours worked in the City of Dallas, up to 64 hours of earned paid sick time per year for medium or large employers (defined as an employer with more than 15 employees at any time in the preceding 12 months, excluding the employer’s family members) and 48 hours per year for small employers (i.e., employers with 15 or fewer employees).[1]
• Leave Usage: Once accrued, employees are entitled to use available earned paid sick time immediately.  However, employers (1) may deny or restrict leave usage during the employee’s first 60 days of employment if the employee’s term of employment is at least one year, and (2) may limit leave usage to no more than eight calendar days a year.[2]
• Permitted Reasons for Use: Eligible employees may use available earned paid sick time for the following reasons: (1) the employee’s physical or mental illness, physical injury, preventive medical or health care, or health condition; (2) the employee’s need to care for their family member’s physical or mental illness, physical injury, preventative medical or health care, or health condition; and (3) certain safe time reasons relating to the employee’s or their family members’ status as a victim of domestic abuse, sexual assault, or stalking.
• Covered Family Member: Under the Dallas Sick Time Ordinance, family member includes the following: (1) spouse; (2) child; (3) parent, and (4)  any other individual related by blood, or any other individual whose close association to an employee is the equivalent of a family relationship. The Dallas Sick Time Rules further added that family member includes step-parents, step-siblings, step-children, step-grandparents, step-grandchildren, anyone who can be claimed as a dependent, and anyone who can claim someone as a dependent. 
• Verification: Employers can ask for reasonable verification of the reason for leave of more than 3 consecutive days, but not require details about the nature of the condition or situation requiring leave. Employers must allow an employee a reasonable amount of time to provide the verification.
• Payment of Sick Time: Employees must be paid an amount equal to what the employee would have earned if the employee had worked the scheduled work time, exclusive of any overtime premium, tips, or commissions, but no less than the state minimum wage.  An employer must pay an employee for his/her use of paid sick time on the payday for the pay period in which paid sick time was used by the employee.  If an employer requires verification of the use of paid sick time of more than three consecutive days, an employer shall pay sick time to an employee no later than the payday for the pay period during which verification is provided to the employer.
• Year-End Carryover: Employers must generally permit employees to carry over all available earned paid sick time up to the applicable yearly cap. However, employers who frontload 64 or 48 hours of earned paid sick time (whichever is applicable) to employees at the beginning of the year are not required to permit year-end carryover of unused time.
• Notifying Employees: Employers must provide the following notifications to employees working in Dallas: (1) display a sign describing the requirements of the Dallas Sick Time Ordinance, (2) include a notice to employees of their rights and remedies under the Dallas Sick Time Ordinance in an employee handbook, if the employer provides employees with handbooks, and (3) provide a written statement to each employee, at least monthly, of their balance of available paid sick time hours, including, among other things, the name of the employee, the name of the employer, the statement’s date, the statement period, the amount of sick time used during the statement period, the amount of the employee’s available paid sick time, and either the number of hours worked within the boundaries of the City and amount of paid sick time accrued during the statement period (for employers using the accrual method) or the paid sick time hours made available during the beginning of the year (for employers using the front-loading method).  The City of Dallas has created model Dallas sick leave posters in various languages and sample language for employee handbooks, available here and here.
• Anti-Retaliation: Employers may not transfer, demote, discharge, suspend, reduce hours, or directly threaten such actions against an employee because the employee requested or used earned paid sick time, reported a violation of the Dallas Sick Time Ordinance, or participated or attempts to participate in an investigation under the Dallas Sick Time Ordinance.

While the Dallas Sick Time Ordinance took effect August 1, 2019, the City will not begin actual enforcement (except for violations of the anti-retaliation provision which are already being enforced) until April 1, 2020.   Notably, there is no private right of action under the Dallas Sick Time Ordinance. But employers may be subject to civil fines of up to $500 for each violation, if the employer does not voluntarily comply within 10 days of notice of violation. 

For employers who have not already revised or rewritten policies, including paid sick leave, call-in procedures, attendance, record keeping, anti-retaliation, and disciplinary policies to comport with the Dallas Sick Time Ordinance -- now is the time.  Enforcement begins in a few short days.

For additional information about Dallas’ Paid Sick Leave Ordinance check out our previous blogs, click here, here,  here, and here.  To access a list of Frequently Asked Questions published by the City of Dallas, click here.

As the paid leave landscape continues to expand, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with specific PSL and paid time off laws and on PSL requirements generally. To stay up-to-date on paid leave developments, click here to sign up for Seyfarth’s Paid Sick Leave mailing list.

 

[1] The Dallas Sick Time Ordinance is silent on how employers should calculate whether they qualify as  medium or large employers. However, the City’s corresponding FAQs provide the following nonbinding guidance - An employer should count the number of employees who have done at least 80 hours of compensable work for an employer within the geographic boundaries of the City of Dallas within the last 12 months, excluding family members but including owners. If the number of employees employed at any one time has varied over the last 12 months, the employer should use the highest number at any one time. An employer should count part-time employees as one employee rather than a fraction of an employee.

[2] While the Dallas Sick Time Ordinance is silent on a definition of benefit year, the Ordinance does note that an employer who, as a matter of company policy, uses a 12-consecutive-month period other than a calendar year for the purpose of determining an employee's eligibility for and accrual of paid sick time must provide its employees with written notice of the policy at the commencement of employment.