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The Portland City Attorney’s Office has published the implementing the city’s new . It will take effect Jan. 1, 2014, and require all private-sector employers to provide up to 40 hours of sick leave per year to all employees employed at least 90 days and working at least 240 hours in a year within Portland city limits.

The final rules have several key changes and clarifications from the proposed administrative rules:

• Rather than requiring employers to use a calendar year for sick time accrual, use and carryover, the rules now permit an employer to use any consecutive 12-month period of time that is normally used for calculating wages and benefits, including a calendar year, tax year, fiscal year, contract year, or the year running from an employee’s anniversary date of employment.

• Employers are not required to provide sick time accrual during hours spent by an employee on paid or unpaid leave.

• Vacation pay accounts, such as those commonly provided by unions, which otherwise meet the minimum accrual rates and leave purposes, satisfy the ordinance.

• When calculating an employee’s time spent working in the city for purposes of leave accrual, for employees who travel through the city and who stop in the city for purpose of their work (e.g., meetings, service calls, deliveries, etc.), an employer may make a reasonable estimate of an employee’s time spent working in the city, including by relying on dispatch logs, delivery addresses and estimated travel times, or historical averages.

• Employers that provide front-loaded sick time (i.e., sick time provided at the beginning of the leave year rather than accrued over the course of the year) are not required to allow an employee to carry over accrued hours to a subsequent year.

• Rather than calculating the number of employees employed by an employer on a quarterly basis, the rules now use the same calculation method as in the Oregon Family Leave Act. That is, for established employers, the number of employees is calculated based on the number of employees who were employed each working day during each of 20 or more calendar work weeks in the calendar year in which the leave is to be taken or in the calendar year immediately preceding the year in which the leave is to be taken. For new employers who did not have any employees for at least 20 workweeks in the previous or current calendar year, the number of employees is calculated based on the average number of employees per calendar work week during the first 90 calendar days of the current calendar year.

• Employees may use sick time beginning on the 91st calendar day of employment – rather than the 90th day – so long as the employee has also worked a minimum of 240 hours for the employer within the city.

• In general, an employer may not require an employee to take off a full shift as a condition of using sick time. However, when it is physically impossible for an employee to commence or end work part way through a shift, the entire time the employee is absent may be counted as sick leave.

• For employees who are scheduled to work a shift of indeterminate length, the employer may determine payment for sick time based on hours worked by a replacement employee in the same shift or similarly situated employees who worked that same or similar shift in the past.

• Unused sick time is retained by an employee if the employer sells, transfers or otherwise assigns the business to another employer and the employee continues to work in the city.

• An employer may deny sick time to an employee if the employee fails to provide notice as required by the ordinance or if the employee fails to make a reasonable effort to schedule leave in a manner that does not unduly disrupt the operations of the employer.

• Similarly, if the employee fails to provide requested documentation of the need for sick time, the employer may deny the use of sick time until the employee provides documentation verifying that the absence was for a qualifying reason.

• If an employer requires verification from a health care provider, in all instances, the employer must pay the cost that is not covered by insurance or another benefit plan. The proposed rules provided that, in cases in which the employer suspected abuse of sick time, that the employee had to pay the cost of verification, but this is no longer permitted.

• Employers must provide written notice to all employees who work in the city of their entitlement to sick time, including the amount of sick time, terms of its use, the prohibition against retaliation, and the right to file a complaint if sick time is denied or if an employee experiences retaliation for requesting or taking sick time. The final rules mandate that employers provide this notice to employees no later than the end of the first pay period in 2014 or, for new employees, the end of the first pay period for those employees.

• Additionally, employers must display a poster – which the city is expected to publish by the end of the year – in each building and worksite in an area accessible to and regularly frequented by employees.

• Both the employer’s notice and the poster must be in English as well as any additional languages normally used to communicate with employees.

• Employers must keep specified records for two years. The final rules expand the records that employers must keep to include not only the name, address and occupation of each employee and the amount of sick time or PTO accrued and used by each employee, but also the following:

— For hourly employees, the hours actually worked in the city during each pay period by each employee,

— For salaried employees who work in the city on a regular basis, the hours of a normal work week for each employee,

— For salaried employees who work in the city on an occasional basis, the hours actually worked in the city during each pay period by each employee, or

— For employers that choose to front-load sick time or PTO, the amount of sick time or PTO front-loaded and the dates on which the sick time or PTO is available to the employee to use.

• If an employer denies an employee the use of sick time and the employee works on a day he or she would have otherwise taken sick time, BOLI may assess a civil penalty equal to three times the dollar amount of sick time the employee was refused or $250, whichever is greater, payable directly to the affected employee.

Now that the administrative rules are set, employers should carefully scrutinize any existing policies they have, including for sick leave, PTO, or attendance violations, and make any necessary changes before Jan. 1, 2014. Additionally, payroll personnel should begin now in establishing a system for tracking and retaining the required information.

Amy Angel is a partner with Barran Liebman LLP. Contact her at [email protected].