As some businesses are preparing for Austin’s new paid sick leave ordinance, which is set to go into effect Oct. 1, 2018, Austin-based think tank Texas Public Policy Foundation is preparing to go to court with the city.
TPPF announced it is part of a group that filed a lawsuit Monday against the city, saying the ordinance violates the Texas Constitution. The group represents four Austin businesses as well as the Texas Association of Businesses, the National Federation of Independent Business and the American Staffing Association.
“We have a coalition representing nearly every business and industry that operates the city of Austin,” said Robert Henneke, lead counsel representing the plaintiffs in this lawsuit.
He said their coalition believes that the ordinance causes the minimum wage in the city of Austin to be greater than the Texas minimum wage and that the city does not have data to show this ordinance is in governmental interest.
They also believe it violates the Texas Constitution’s protections against unlawful search and seizure because it gives the city subpoena power for businesses accused of violating the ordinance.
On a conference call Tuesday, the Texas Association of Businesses said they had petitioned city council formally for time to speak about their concerns, but there was not an opportunity for their members to have their voices heard. TAB said this is the first time their litigation center has decided to take action on a city ordinance.
“This is an ordinance that was adopted with a very short time frame despite loud, vocal opposition from businesses here in Austin,” Henneke said. “We think the evidence will show that Austin businesses already do a very good job in accommodating for hardship.”
The group argues the new paid sick leave policy makes it more difficult for small businesses to operate and will drive up the cost of business.
The ordinance requires businesses with more than 15 employees to provide eight days of paid sick leave. Businesses with fewer than 15 employees must provide six days of sick leave. Under the ordinance, employees will accrue one hour of sick time for every 30 hours they work and can start using it as soon as they’ve earned it.
Companies that have fewer than five employees have until October of 2020 to comply.
“It seems that they were in a hurry to pass this and didn’t make many exceptions. I just don’t think it’s a workable program,” said Mark Turpin, CEO of the HT group. Turpin’s company, which does temp work and technical staffing, is one of the companies listed in the lawsuit.
Turpin figures he will have to pay an additional $100,000 in benefits each year based on this ordinance.
“As a temporary agency we allow our employees six paid holidays per year, and that’s based on them achieving a certain minimum hours worked, we’ll have to change that to accommodate for the sick pay,” Turpin said. “Whereas they may have equal or as many days off, they will not automatically get paid for holidays.”
Turpin said he thinks paid sick leave is a good thing, he just doesn’t feel that the version of the ordinance the city passed is “workable.”
The Workers Defense Project, one of the groups who supported the ordinance, said that since it passed they’ve been hearing from workers hopefully anticipating these benefits.
“People are getting really excited about this policy, and they are getting really excited to not have to make the difficult choices they have to make right now from going to work sick or taking a pay cut,” said Jose Garza, the executive director of the Workers Defense Project.
Garza said that when the average family in Texas misses out on three days of work because they are sick, they lose the same amount of money they would need for one month’s groceries. He believes sick pay ordinance reflects the needs of hundreds of thousands of working Austinites.
In response to TPPF’s concerns that the ordinance will allow the city to subpoena businesses that are in violation, Garza said that businesses abiding by the law should have nothing to worry about. He added that in many other cities that have adopted paid sick leave policies, businesses have voiced similar concerns before the law went into effect.
“There are out-of-state of special interest groups who don’t want that to happen, they know how close we’re getting,” Garza said.
In a response to the lawsuit, Work Strong Austin released a statement saying, “We know Austin residents will ultimately prevail over this frivolous lawsuit, but let there be no doubt: today’s announcement is cowardly, desperate, and shameful.”
Council Member Greg Casar noted that the United States is the only advanced economy in the world that doesn’t require paid leave as a workplace standard.
“Everyday Austinites fought and won paid sick days because it’s a common-sense approach to address our serious health and safety needs. In today’s lawsuit, anti-worker groups admitted that they don’t comprehend why paid sick days are so important to everyday people. If the big business lobby talked to anyone besides their expensive attorneys, maybe they would understand why working parents sometimes need to take a sick day,” said Casar said in a statement.
Iconic Austin shop Waterloo Records and Video said they only had to make minor tweaks to their policy to make it compliant with the new rules.
Around 30 years ago, owner and president John Kunz was looking over a Whole Foods employee manual, liked what he saw and put together the benefits program. His employees have a bank of time that can be used as sick days or vacation days depending on their needs.
Even though the record business isn’t thriving like it used to, Kunz said it’s still a big priority for him to offer these benefits for his 50 employees.
“Everyone needs to know that they’ve got that backup, you know?” Kunz said. “We want to be all the way behind them.”
But he acknowledged that offering those benefits is more difficult now.
“Those things were much easier in the heady days of the record industry as opposed to the internet-challenged days of the record industry, and every business is going to go through its ups and down cycles, and there’s gonna be times when something of that sort is more manageable and times when it’s gonna be a real strain,” Kunz said.
“I think every employer would really like to offer all that stuff,” Kunz added.”It really is up to each individual business.”
The plaintiffs in the suit have a hearing set for May 29. They have filed a motion for a temporary injunction and plan to ask the Travis County Court to stop the implementation of the city’s ordinance.
Have a comment? Leave it in the post below: