Sick Leave: A Wage by Any Other Name?

Last Friday, Nov. 16, the Texas 3rd Court of Appeals struck down the paid sick leave ordinance passed by the Austin City Council in February. The Austin-based court decided the workers' rights ordinance violated the state constitution and the Texas Minimum Wage Act, which bars cities from increasing wages beyond those permitted by state law.

Labor groups are calling foul, saying the ruling is based on twisted logic and sets an "awful precedent" for employee rights. The ordinance requires businesses with more than 15 employees to provide up to eight days of paid sick leave, and smaller businesses to provide up to six. It also applies to time off work for legal action related to domestic abuse, sexual assault, or stalking, and for taking care of sick family members. It could affect more than 200,000 local workers.

In its 24-page ruling, a three-judge panel of the 3rd Court ­­– Justices Jeff Rose, David Puryear, and Scott Field – classify paid sick leave as a wage rather than an employee benefit, mimicking legal arguments presented by the Texas Public Policy Foundation (which represents business groups including the Texas Association of Business in their fight against the ordinance) and their allies at the Texas Attorney General's office. The judges write that employees who earn and take paid sick leave will be paid more than employees who work the same hours without paid sick leave. "Stated differently, employees who take sick leave will receive more pay per hour than actually worked. Thus, the ordinance establishes a wage."

Rick Levy of the Texas AFL-CIO calls that a "bizarre departure" from "most everyone's" understanding of benefits. "They've rigged the rules by counting paid sick leave as a wage, which opens the door for some employers to pay less than $7.25 an hour and count other benefits like paid holidays or even health insurance as part of the minimum wage," Levy tells the Chronicle. "They clearly started with wanting to get a particular result for a particular group of people and worked backward, applying the law unfairly."

Paid sick leave champion CM Greg Casar echoed that point, calling the idea that sick days are tantamount to minimum wage "absurd." He and the Workers Defense Project both noted that two of the judges on the panel (Puryear and Field) were defeated by Democrats earlier this month. WDP called their decision "a desperate, final attempt by humiliated judges to side against working families on their way out the door." Casar said trotting out an "anti-worker" decision before their January exits was mostly anticipated.

It's not quite the end of the road for paid sick leave; the three-judge panel remanded the lawsuit brought by TPPF et al., against the city of Austin for a full trial, and ordered Travis County District Judge Tim Sulak to issue the temporary injunction against the ordinance which he had denied in June. While slamming the 3CA for usurping Sulak's ruling, the city is currently "reviewing" its options in the case: "Ensuring workers are able to take time off work when they are sick is simply the right and responsible thing to do, as many cities have already acknowledged," it said in a statement.