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COMPLIANCE UPDATE: City of Austin Paid Sick Leave Ordinance 2/26/2018

Compliance Update

On February 16, 2018, the Austin City Council passed a paid sick leave ordinance effective October 1, 2018 for all size employers except for micro-employers (no more than 5 employees at any time during the preceding 12 months), which is effective October 1, 2020.

An “Employee” is defined as an individual who performs at least 80 hours of work for pay within a calendar year for an employer within the City of Austin, including services performed through a temporary or employment agency. The term “Employee” does not include an independent contractor, unpaid intern, or family members.

The term “Employer” includes all private sector employers, non-profits and associations. However, it does not include any state agency, political subdivision, or any other agency that cannot be regulated by City ordinance.

Employees earn one hour of paid sick leave for every 30 hours worked for the employer within the City of Austin. Accrual of sick leave commences the later of the date of employment or when the rules are effective. Paid sick leave is available for use as soon as it has accrued. An employer may restrict an employee from using paid sick leave during the employee’s first 60 days of employment if the employer establishes that the employee’s term of employment is at least one year.

Paid sick leave may be requested for absence(s) due to:

  • an employee’s physical or mental illness, injury and services for preventative medical; or
  • an employee’s need to care for a family member due to their physical or mental illness, injury and services for preventative medical; or
  • an employee’s need to seek medical attention or relocation, obtain victim services, or to participate in legal or court ordered action related to being a victim of domestic violence, sexual assault, or stalking.

Employers who employed more than 15 employees during the preceding 12 months must provide up to 64 hours (annual cap) of paid sick leave per calendar year, while smaller employers (no more than 15 employees) must provide up to 48 hours of paid sick leave. If sick leave is earned on an accrual basis instead of front- loaded at the beginning of each year, any unused paid sick leave must carry over to the following year. A statement must be provided to employees showing the amount of earned sick leave at least once per month and notice regarding the employee’s rights to paid sick leave must be provided in the employee handbook.

Employers must also post signage describing the requirements in “at least English and Spanish”. Employers are not responsible for posting signage until the City of Austin creates and makes it available to employers.

Employers who currently provide paid time off that meets or exceeds the accrual, purpose, and usage requirements are not required to provide additional paid leave, nor does an employer need to provide additional paid sick leave if the employee has already utilized time off that meets or exceeds the Ordinance requirements.


The information contained herein is for general informational purposes only and does not constitute legal or tax advice regarding any specific situation. Any statements made are based solely on our experience as consultants. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein.

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