Federal judge says Dallas Paid Sick Leave Ordinance violates state minimum wage law

Employers in the city of Dallas can now disregard the Dallas Paid Sick Leave Ordinance. The ordinance contained in Chapter 20 of the Dallas City Code originally went into effect August 1, 2019 and required employers with five or more Dallas residents to provide one hour of paid sick leave for every 30 hours worked. Two Dallas-based companies and the state of Texas sued the city of Dallas for banning it from implementing the ordinance. An injunction was issued on March 30, 2020 to maintain enforcement of the regulation pending litigation.

On March 31, 2021, a Texas federal judge issued a standing order blocking the ordinance. According to the presiding judge, the ordinance violates the Texas Minimum Wage Act and is not enforceable under the Texas Constitution, as private employers have to pay regular hourly wages for hours that are not worked by employees who are on sick leave. By requiring private employers to pay a wage other than the state minimum wage, the Texas Minimum Wage Act found that regulation is excluded.

This standing order seems to reflect an emerging trend across the state, as Austin and San Antonio have also ruled their recently enacted paid sick leave ordinances unconstitutional by two different Texas state appeals courts. The Texas Supreme Court has not yet looked into the constitutionality of paid sick leave ordinances similar to those of Dallas, Austin, and San Antonio. Unless this is the case and Texas law changes the state’s prohibition of local wage laws, paid sick leave regulations that affect minimum wage are likely to be struck down as mandated by the Texas Minimum Wage Act and unenforceable under the Texas Constitution.

The bottom line is that private employers can now disregard the Dallas Paid Sickness Regulation, but should remain aware of future developments that may arise in relation to the regulation and other wage and hour laws and regulations that affect the business community in Dallas have.

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