Governor Kate Brown signed into law the new Oregon Paid Sick Leave (“OPSL”) law enacted by the Legislature on June 12. The new law becomes effective January 1, 2016. Oregon is the fourth state to enact a state-wide paid sick leave law after Massachusetts, Connecticut, and California. The text of the OPSL is available here.
The OPSL will look familiar to Oregon employers that have already been dealing with local PSL ordinances enacted in Portland and Eugene in recent years, which OPSL now preempts and replaces. OPSL largely tracks those local leave laws in substance, and generally requires employers to provide up to 40 hours of sick leave per year. Here is a detailed summary of its requirements, including where it differs from the Portland and Eugene ordinances.
|A state-wide law.||The OPSL will create new implementation challenges for many Oregon employers that have never had to deal with mandatory paid sick leave before. However, the new statute may come as a relief to many employers in and around the Eugene and Portland metro areas that have struggled with arguably the most difficult aspect of those ordinances: implementing and tracking them on the local, as opposed to statewide, level. For some employers that had mobile or remote workers, tracking which employees performed work within the city limits of Portland or Eugene (and therefore accrued PSL under the local ordinances) compared to those who did not was an administrative headache. Now, administering compliance with paid sick leave will be little different than dealing with Oregon’s numerous other statewide employment laws, including the Oregon Family Medical Leave Act (“OFLA”), laws protecting employees with disabilities, anti-discrimination and anti-retaliation laws, and strict wage and hour laws.|
|Employers of 10 or more employees (or 6 or more in Portland) are covered||The main difference between OPSL and the Portland and Eugene ordinances it replaces is that OPSL applies only to employers of ten or more employees, as opposed to six or more under the local ordinances. Note that there is a carve-out for cities over 500,000, which in Oregon means only Portland. So, Portland employers of six or more employees are still required to provide PSL just as they were under the Portland ordinance.Another difference is that OPSL applies to state government employees (federal government employees are not covered, however).|
|Employees entitled to leave.||Except for a few minor exceptions that are not applicable to most employers (railroad employees, children employed by their parents, etc.), all employees are covered, including exempt, nonexempt, part-time and temporary employees.|
|How much leave?||Employees must be able to accrue and use at least 40 hrs per year, earned at a rate of 1 hour per 30 hours worked (or, interestingly, 1 1/3 hrs per 40 hours worked, which comes out the same). Exempt employees accrue based on their regularly-scheduled work week (e.g., a fulltime exempt employee accrues as if they work 40 hours per week) regardless of actual hours worked. Employees begin accruing PSL immediately from the first day of work. Employers can “front load” leave banks at the beginning of each year. Employers who “front load” do not need to track accrual throughout the year (obviously – they “accrue” it all up front), or allow roll-over to subsequent years (see below).
Employees hired before January 1, 2016, may begin using PSL immediately after the effective date. Employees hired after that date may be required to wait 91 days before being eligible to use their leave, although the 91-day eligibility period can be waived by the employer.
|Roll-over and payout at termination of employment||Employers that use the accrual method must allow employees to (1) roll over up to 40 hours of accrued, unused PSL from year to year, or (2) with the employee’s mutual consent, pay the employee the equivalent of the unused PSL at the end of the year and front-load the employee 40 hours of leave to start the following year. Unused, accrued PSL does not need to be paid out at termination, but can be. If it is not paid out at termination, employees maintain already-accrued PSL balances if they are rehired within 6 months. Similarly, employees retain accrued PSL if they are transferred between divisions in the company, or if the company is sold.|
|PSL pay rate||Hourly, non-exempt employees should be paid for PSL at their regular rate of pay. Commissioned or piece-rate employees’ PSL pay rate is the Oregon minimum wage.The hourly rate of pay for exempt employees depends on their regularly-scheduled workweek (40 hours per week for fulltime employees). Note smaller employers with fewer than ten employees (or Portland employers with fewer than six employees) must still provide leave as set out in the statute, but the leave can be unpaid.|
|Employers with existing sick leave or PTO plans need not provide additional leave.||Here is another change from the Portland Paid Sick Leave Ordinance. An employers’ existing sick leave or PTO policy will be deemed to already comply with OPSL if it is “substantially equivalent to or more generous to the employee than” OPSL (emphasis added). Portland’s leave ordinance had been interpreted to require an existing leave policy be at least as generous in all substantive respects. What type of plan is considered to be “substantially equivalent” to OPSL remains to be seen. For example, what if an employer’s policy is more generous in some ways (say, by allowing employees to accrue up to 120 hours per year), but not in others (it accrues at a slower rate)? Perhaps BOLI will clarify this and other points when it issues regulations interpreting OPSL. In the meantime, employers should probably provide at least 40 hours of PSL per year and allow it to accrue at comparable rates (i.e., 1 hour of PSL per 30 hours worked). Similarly, and also helpfully, OPSL states that where an employee exhausts available leave under an existing PTO policy—even for non-PSL purposes (i.e., vacation), the employer is not required to provide additional leave. In other words, where an employee uses available PTO for vacation, the employer is not required to provide additional PTO later just because the employee later has a PSL-related absence.|
|No blanket carve-out for employees subject to Collective Bargaining Agreement (“CBA”)||Under Section 12, OPSL includes a blanket carve-out only for employees subject to a CBA and who 1) are employed through a “hiring hall or similar referral system” and 2) receive benefits through a “joint multi-employer-employee trust or benefit plan.” Unfortunately, there is no general carve-out for all CBAs, and unless all the conditions in Section 12 are met, existing leave provided in a CBA will be treated similarly to leave provided in an existing leave or PTO policy – it complies with OPSL only if it is at least as generous as what OPSL requires. This can be difficult for unionized employers, above all by possibly requiring that they re-open negotiations with employee unions regarding leave policies (which are almost always considered a “mandatory subject of bargaining” under federal and state labor laws).|
|Reasons for which PSL may be taken.||Basically, anything related to the health of the employee or a “family member,” including going to routine doctor visits, or staying home with minor illnesses like a cold, staying home with a sick child who is home from school, and including any of the reasons for which employees may take leave under the Oregon Family Medical Leave Act (“OFLA”) (including bereavement, stalking and domestic violence-related leave). OPSL also adopts the definition of “family member” from OFLA: spouse,adoptive/foster/ “in loco parentis” child, grandchild, parent, grandparent, or parent-in-law. PSL may also be used in case of a public health emergency.Note: If the employer has a PTO policy that is already OPSL-compliant, employees can take leave for any reason and employers would not need to determine whether it is a OPSL-protected reason .
Employers may allow employees to donate their accrued but unused PSL to other employees for use as PSL. Employees can take PSL in increments of as little as one hour, unless doing so would constitute an “undue hardship.” Be careful about trying to claim the “undue hardship” exception here—OPSL does not define the term (but states BOLI should do that), but presumably it will be as difficult to show “undue hardship” as it is in other employment contexts, such as related to providing accommodations for a disability under the Americans with Disabilities Act (“ADA”).
|Leave request procedures and documentation||Employees may request leave at any time (by its nature, sick leave will often involve sudden absences). Employers may require advanced notice for “foreseeable” absences.Employers can require that employees follow regular leave request and notification policies, provided that doing so does not interfere with the employee’s right to use leave.In addition, employers may request medical certification only for absences of three consecutive days or more, but the employer must pay for it if it is not covered by the employee’s health insurance. The employer may also request medical certification if the employer suspects a “pattern of abuse” of OPSL. Interestingly, OPSL specifically identifies “pattern of abuse” to include regular requests for PSL on days adjacent to weekends, vacation days, and holidays. Despite this “abuse” provision and the express allowance that employers can continue to maintain their policies about requesting leave, employers should be very cautious about scrutinizing appropriate use of OPSL, or whether employees have followed policy formalities in requesting leave. That type of scrutiny could be perceived as “interference” or “retaliation.” (See below) Employers must pay for any cost of medical verification not covered by insurance.|
|Employers can allow employees to work “comp time” in lieu of using PSL for covered absences||Interestingly, OPSL allows employers to let employees work “comp time” of additional hours if they are absent for a reason covered by PSL but choose not to use PSL. An employee may choose to do this to save up PSL for future absences. Employers may not require employees to do this (both the employer and employee must agree) and must comply with all wage laws regarding overtime if the additional hours worked mean the employee will work overtime.|
|Employers must provide written notice to employees, at least quarterly, of available PSL balances.||The easiest way to comply with this one is to print PSL balances on regular paystubs, if your payroll system facilitates doing so. For employers who cannot do this in their payroll software, tracking and providing this notice can be a headache.|
|Interference and retaliation prohibited.||OPSL prohibits all the usual types of interference and retaliation, including refusing to provide required PSL or retaliating against employees who request or take PSL.Note OPSL expressly prohibits employers from counting protected absences against employees pursuant to “absence control policies,” i.e. “points” systems and similar no-fault attendance policies.|
|Oregon Bureau of Labor and Industries (“BOLI”) to adopt regulations and develop required posters and notices||It will be interesting to see what BOLI does here. BOLI was tasked with enforcing the Portland ordinance, but had not yet gotten very far.|
|Remedies for violations||Employees can assert an alleged violation of OPSL by either filing a charge with BOLI or by filing a civil lawsuit in court. The remedies employees can recover are limited to economic damages, reinstatement, and attorney fees. ORS 659A.885(1)-(2). Notably, plaintiffs may not seek a jury trial and uncapped emotional distress and punitive damages available under ORS 659A.885(3). OPSL also incorporates the remedies of ORS 653.256 by enabling BOLI to assess a $1,000 penalty. Presumably to give employers time to adjust to the new law, BOLI is prohibited from seeking this penalty until January 2017.|
What Should Employers Do?
Employers have about six months to prepare to implement OPSL. Employers already subject to the Portland or Eugene ordinances will have a headstart, but should still carefully review their leave or PTO plans for any differences with OPSL noted above.