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Oregon law now mandates that sick leave benefits be provided to employees working in the state. For employers with 10 or more employees in Oregon or more than six employees in the Portland-metro area, the leave is paid. For employers with fewer employees than the minimum threshold, the leave is unpaid. The law exempts employees who are covered by a collective bargaining agreement, hired through a hiring hall or similar referral system, and who already receive such benefits through a joint multi-employer-employee trust or benefit plan.

The law allows the sick leave benefit to be satisfied by a substantially equivalent vacation, sick leave, or paid time off (PTO) policy, and many employers are in that boat. However, don’t assume that because an existing company policy provides at least 40 hours of paid leave, it doesn’t need to be updated. This is unlikely to be true.

In fact, many pre-existing policies actually have gaps, contrary provisions or other procedural requirements that conflict with the new law and require an update to achieve compliance. Here are some:

• Eligibility is too narrow. Many pre-existing policies provide leave only to regular, full-time employees, and often only after a certain time period. The new law requires that leave begins to accrue immediately upon hire, and irrespective of whether the person is exempt or non-exempt, full or part time, or seasonal/temporary or regular. Note, that the law does permit an employer from prohibiting the use of accrued leave until the 91st day of employment, however.
• Accrual isn’t clear or complete. This mandatory sick leave must accrue for all employees at a rate of at least 1 hour for every 30 worked, up to a total of 40 hours per year. As an alternative to the hourly accrual method, employers are permitted to front-load the entire amount of leave at the beginning of the year. For new employees who have not yet worked a full year, that amount can be pro-rated. The rules also permit employers to adopt different accrual methods for different classes of employees, provided the classification is established by the employer for reasons other than sick leave administration. For example, a company may opt to use the accrual method (i.e., 1 hour for every 30 worked) for hourly non-exempt employees and the front-load method (a lump sum of 40 hours or more) for exempt (salaried) employees. Also, a distinction may be drawn between regular full-time employees and part-time or temporary ones, or both. Either way, the written policy should be clear and cover all applicable classifications.
• Too much notice is required. The Oregon law allows employers to require no more than 10 days’ notice of need for leave when the need is foreseeable. Pre-existing policies or rules that require more than 10 days’ notice need to be updated accordingly.
• The policy includes an outdated list of permissible uses. What must be excused and not counted against an employee under the new sick leave law is broader than just an employee’s personal illness or medical care. If a current policy lists specific reasons that leave can be used for, it should be updated to include: time off for family member health issues, absences protected by Oregon’s domestic violence leave laws, absences due to school closures resulting from a public health emergency or other related public health concerns, time needed for attending/making arrangements for funerals and related absences, and any other reasons required under the new law.
• Verification is required for situations that no longer permit it. Absent reasonable suspicion of abuse, medical or other documentation of the need for sick leave cannot be required unless the absence exceeds three days or is foreseen. Just as under the Oregon Family Leave Act (OFLA), the employer is required to pay the cost of any medical verification that is not covered by insurance or another benefit plan.
• Carryover is not clearly addressed. The law requires that up to 40 hours of unused accrued sick leave be permitted to carry over into the next year. Employers can avoid carryover only by cashing out accrued leave at the end of the year and immediately front-loading the entire annual amount at the beginning of the next year.
• Forfeiture is not addressed. Employees sometimes have the misconception that accrued sick leave must be paid out at termination. That is not true under current Oregon law, so it’s strongly recommended that if an employer does not plan to cash out the sick leave benefit at the end of employment, then it is stated clearly in its policy to avoid confusion or misunderstandings. Also, be sure that the full amount of previously accrued leave be credited back to an employee if he or she is rehired within 180 days. This does not necessarily need to be included in the policy, but be sure to comply if it applies.

A special note

There is a new wrinkle for employers that take on state public works projects or other prevailing wage work that needs special attention: the paid leave benefit mandated by the Oregon sick leave law may NOT be credited toward fringe benefits because prevailing wage laws only allow credit for sick leave benefits NOT mandated by law. So, for employers that offer only the 40 hours of paid benefits required by law, that amount now cannot be credited toward fringe. However, if additional benefits are offered beyond 40 hours, or if an employer is required only to provide unpaid sick leave but opt to make it a paid benefit, it can be credited toward fringe.

For employers working federal contracts, an executive order that will impose a similar sick leave requirement is scheduled to go into effect on Jan. 1, 2017, but with a higher accrual cap at 56 hours. The DOL in its final rule confirmed that the same interpretation will be applied in the context of the federally mandated sick leave.

Keep in mind that this brief summary is intended to highlight some unique, practical considerations related to the new sick leave law and related employer policies, and not replace independent legal advice for any particular situation or proposed policy.

Amy Robinson is a Jordan Ramis PC shareholder practicing in its employment practice group. She has Senior Professional in Human Resources (SPHR) certification as well as a Senior Certified Professional (SHRM-SCP) designation from the Society for Human Resource Management. Contact her at 503-598-7070 or [email protected].