Oregon recently passed amendments to its statewide sick time law, clearing up several areas of uncertainty for employers.  The amendments clarify that:

  • Employers may cap employees’ annual accrual of sick leave at 40 hours. The pre-amendment version of the sick leave law stated that employees had the right to “earn and use up to 40 hours of paid sick time per year,” but also mandated that employees accrue one hour of paid sick time for every 30 hours worked.  At the “1 for 30” rate, full-time employees would reach the 40-hour limit well before the end of the year, leading to confusion about whether they were entitled to continue accruing sick time for the remainder of the year (which would, in effect, give them more than 40 hours of annual leave).  The amendments, which expressly state that “[e]mployers may limit the number of hours of paid sick time that employees may accrue to 40 hours per year,” make clear that continued accrual beyond 40 hours is not a requirement.  Once employees have accrued 40 hours, they are done for the year, even if there are several months left in which they will not accrue any time.
  • Employers can limit total accrual and annual use of sick leave. Although employers are required to allow employees to carry over up to 40 hours of sick time per year (unless they frontload at least 40 hours at the beginning of the year), they can prohibit employees from accruing more than 80 hours of leave total.  Employers can also prohibit employees from using more than 40 hours of sick time in a year, even if they have more time available as a result of carryover.
  • Employers who already have policies that provide more than 40 hours of paid time off per year need only make sure that their policies comply with the requirements of the sick leave law for the first 40 hours in a year, and are not required to track the reasons for employee absences. Previously, the Oregon Bureau of Labor and Industries had advised employers who offered more than 40 hours of paid time off (“PTO”) or similar leave, but did not allow employees to use the entire amount of PTO available as “protected” time under the sick leave law, to track the reasons for employee absences.  That interpretation was particularly frustrating to employers who had adopted a PTO program, in large part, so they did not have to monitor the reasons why employees took time off, and wanted to provide generous benefits without the negative impacts that might result from “protecting” excessive absenteeism.  The amendments confirm that employers who already provide paid time off in some form need only make sure that their policies are compliant for the first 40 hours in a year (meaning, among other requirements, that employees must accrue their first 40 hours of time off in a year at a sufficient rate, and be permitted to use that time without adverse consequences for qualifying reasons under the Oregon law).  Employers are no longer required to track how employees are using their first 40 hours of leave, and may apply their normal policies for anything beyond that threshold.
  • Employers who maintain a seasonal or temporary farmstand or trailer in Portland are not considered to be “located” in Portland. Portland employers with six or more employees are required to provide paid sick time, while employers in the rest of the state are only required to provide paid sick time if they have 10 or more employees.
  • Certain people are not “employees” entitled to sick time. The Oregon law does not cover certain corporate directors, LLC members and LLP partners, along with sole proprietors (and the parents, spouses, and children of all of the above).

The amendments go into effect January 1, 2018.*

 

*This post was modified to clarify that the amendments themselves go into effect January 1, 2018.  However, the amendments will not materially change the manner in which most employers have been interpreting and applying the Oregon law.