Last year, San Antonio joined the Austin in passing a law requiring employers to provide paid sick leave. Last week, business owners fought back.
A coalition of business groups filed a lawsuit alleging that the city ordinance, which is set to take effect on August 1, violates Texas' minimum wage laws.
Does the Texas Minimum Wage Act preempt a city ordinance?
According to the Texas Tribune, the coalition claims state law "explicitly prevents localities from requiring private employers to pay more" than minimum wage. Therefore, they argue, sick leave issues should be regulated at the state level, and San Antonio's ordinance is unconstitutional.
Texas Labor Code §62.0515, part of what is known as the Texas Minimum Wage Act, does state:
"Except as otherwise provided by this section, the minimum wage provided by this chapter supersedes a wage established in an ordinance, order, or charter provision governing wages in private employment, other than wages under a public contract."
The question then becomes: Is the paid sick leave ordinance preempted by Texas' minimum wage law?
San Antonio sick leave ordinance might go the way of Austin's
Last fall, the 3rd Court of Appeals declared Austin's sick leave ordinance was preempted by state law. There, the city argued that its sick leave ordinance did not "establish a wage" because paid sick leave is a benefit rather than a payment for services. However, the justices on the court of appeals disagreed, finding that "the effective result is that employees who take sick leave are paid the same wage for fewer hours worked."
When a city ordinance places an unfair burden on business owners, that doesn't have to be the end of the story. Whether the overstep is by a government entity, a customer, or another business, companies in Texas rely on the guidance of experienced litigators to protect their bottom line.