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, found in Chapter 20 of the Dallas City Code, originally went into effect on August 1, 2019, and required employers with five or more Dallas-based employees 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 to enjoin it from implementing the ordinance. A temporary injunction was issued on March 30, 2020, to stay the enforcement of the ordinance while the lawsuit was pending.
On March 31, 2021, a Texas federal judge issued a permanent injunction, blocking the ordinance. According to the presiding judge, the ordinance violates the Texas Minimum Wage Act, and is unenforceable under the Texas Constitution, because it requires private employers to pay regular hourly wages for hours that are not actually worked by those employees who take sick leave. By requiring private employers to pay a wage other than the state minimum wage, the ordinance was found to be preempted by the Texas Minimum Wage Act.
This permanent injunction appears to be reflective of an emerging trend across the state, with Austin and San Antonio having also seen their recently enacted paid sick leave ordinances enjoined as unconstitutional by two different Texas state appellate courts. The Texas Supreme Court has not yet addressed the constitutionality of paid sick leave ordinances similar to those enacted by Dallas, Austin and San Antonio; until it does and says otherwise, or the Texas Legislature changes the state’s prohibition on local wage laws, paid sick leave ordinances that affect the minimum wage will likely be struck down as preempted by the Texas Minimum Wage Act and unenforceable under the Texas Constitution.
Bottom line, private employers can now disregard the Dallas paid sick leave ordinance, but should continue to stay informed on future developments that may arise concerning the ordinance and other wage and hour laws and regulations impacting the Dallas business community.