Oregon employers in 2013 were confronted with a whirlwind of changes from federal and state lawmakers, courts and administrative agencies. The bills and decisions of last year are now the law of the land, and many became effective on or before Jan. 1.

Following are some of the major pieces of legislation and decisions from 2013. Employers who have not updated their employee handbooks and internal policies recently should do that now to ensure compliance.

Portland sick leave

The Portland City Council approved an ordinance requiring all private employers to provide up to 40 hours of protected sick leave per year to eligible employees who perform work within Portland city limits. Employers with six or more employees must provide the leave on a paid basis. The ordinance and administrative rules also regulate sick leave accrual, record-keeping, use, employee notices and employer policies.

The Bureau of Labor and Industries, the enforcement agency, has the authority to inspect an employer’s records to ensure compliance and to investigate allegations of noncompliance. Substantiated complaints may lead to civil penalties payable to both the city of Portland and to the employee directly in addition to all other remedies already available.

Employers with existing sick leave policies should carefully compare their practices to the mandates of the ordinance and administrative rules. Often they will find that substantive changes are required to achieve full compliance.

Oregon domestic violence leave

Effective Jan. 1, employers who employ six or more employees in Oregon must provide eligible employees with leave time to address matters of domestic violence, harassment, sexual assault and stalking (DVHSS). Employees who are victims of DVHSS or who are parents or guardians of minor children who become victims of DVHSS are eligible to take protected leave time from their first day of employment.

For private employers, DVHSS leave may be provided on an unpaid basis, but employees are entitled to use any accrued vacation or other paid leave to supplement their incomes. Public employers must provide up to 160 hours of DVHSS leave with pay per calendar year to employees who have exhausted all other forms of paid leave.

Oregon bereavement leave

Employers who are subject to the Oregon Family Leave Act must now provide up to two weeks of unpaid bereavement leave to OFLA-eligible employees. Bereavement leave must be completed within 60 days of the date on which the employee receives notice of the family member’s death. In the unfortunate event of multiple deaths within the same year, the employee is entitled to take up to two weeks of bereavement leave for each family member until the employee’s OFLA leave entitlement is exhausted.

Social media accounts

Effective Jan. 1, employers may not require employees or applicants to disclose their personal social media account content. Employers may not require the disclosure of user names and passwords or compel employees and applicants to “friend,” “link,” or otherwise connect with the employer.

Affordable Care Act regulations

The Affordable Care Act was passed in 2010, but its implementing regulations have continued to expand in 2013 and beyond. The most recent rulemaking action occurred on Feb. 10, in which the IRS adopted final rules regarding shared responsibility payments for employers. The final rule adopts, among other things, a new transition relief program for employers with 50-99 full-time employees. Employers should expect further rulemaking throughout 2014.

Changes for same-sex couples

In June 2013, the U.S. Supreme Court struck down Section 3 of the Defense of Marriage Act in United States v. Windsor. That section defined marriage as being between a man and a woman for purposes of federal law.

Since the Windsor decision, various federal agencies have adopted rules regarding which benefits will apply to same-sex couples who are or who become lawfully married. These rules impact every employer policy and practice that relates to an employee’s marital status, including payroll taxes, leave administration, employee benefit plans, Portland sick leave, and the availability of health care subsidies under the Affordable Care Act.

NLRB scrutiny

The National Labor Relations Board carefully scrutinized a long list of employer handbook policies last year. Prime candidates for review included:

• Employment at-will statements;

• Public relations / media relations policies;

• Confidentiality policies;

• Mandatory arbitration agreements;

• Nondisparagement policies;

• Network and computer use policies;

• Nonsolicitation policies;

• Ethics and business conduct policies;

• Dress code policies;

• Social media policies; and

• No-gossiping policies.

In most cases, the NLRB found the challenged policies unlawfully broad. In other words, the policy language could reasonably have been understood by employees to prohibit protected concerted activities. Remedies in those situations included cease and desist orders, reinstatement, and back pay for employees who were terminated for violating the policies.

This list of 2013 changes is not comprehensive, but it demonstrates the breadth and scope of compliance issues faced by Oregon employers in a very short time frame. Because the changes are now in effect, employers that have not updated their employment policies should consult with competent employment law counsel soon to ensure their compliance.

Heidi Mason is an attorney in Jordan Ramis PC’s labor and employment law practice group. Contact her at 503-598-5504 or at heidi.mason@jordanramis.com.

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If your organization does business in Portland, you may have recently received a mailer from the city regarding mandatory sick leave for employees. The mailer references the city’s new Protected Sick Time ordinance and administrative rules, which go into effect on Jan. 1.

The ordinance requires all private employers to accrue at least one hour of sick leave time to each employee for every 30 hours of work the employee performs in Portland, up to a maximum of 40 hours per year. Employers with five employees or fewer need not pay them for this time, but employers with six employees or more (counting all full-time, part-time, temporary and seasonal employees, even if they work outside the city or Oregon) must provide paid leave.

Employees who perform work in Portland are entitled to sick-leave time even if their employers are headquartered or located outside of Portland. For example, the following employees are entitled to accrue sick-leave time:

• Employees who regularly work within Portland city limits;

• Employees who travel to Portland and make a stop or a pickup or a delivery or perform any work in Portland (these persons accrue time for all hours that they perform work in Portland); and

• Employees who telecommute while physically present in Portland.

The city has provided an online map tool that employers may use to determine whether a location falls within city boundaries. Employees who merely travel through Portland without stopping, or who make incidental stops in Portland to purchase gas, eat a meal or change a flat tire do not accrue sick leave for that time.

Employees with accrued Portland sick leave may not use that time until they: have worked at least 240 hours in Portland; have been employed for at least 90 calendar days; plan to use the time when they are scheduled to work in Portland; and have a qualifying reason. Portland sick leave is available:

• To seek diagnosis, care or treatment of the employee or the employee’s family member’s mental or physical illness, injury or health condition. This includes routine medical and dental visits;

• To seek legal assistance, medical treatment, counseling and other services related to domestic violence, harassment, sexual assault or stalking;

• In the event the employee’s work or the employee’s child’s school or day care is closed by a public official due to a public health emergency;

• To care for the employee’s family member whose presence in the community jeopardizes the health of others; or

• If the employer is required by law to exclude the employee from the workplace for health reasons.

Sick-leave time may be used in increments of one hour, and employees who meet the eligibility requirements are entitled to use sick leave as soon as it is accrued, even if that occurs in the middle of a pay period. Employees may also carry over up to 40 hours of unused sick leave time from one year to the next, but may not take more than 40 hours of sick-leave time per year without employer approval.

The Portland sick-leave ordinance also includes notification requirements. Employers must notify employees of their protected sick-leave rights in three different ways:

1. Display a poster of the new law in each building and at each worksite;

2. Provide individual notices in writing to current employees by the end of the first pay period in 2014. For new employees, the individual notices must be given by the end of the new employee’s first pay period; and

3. Provide a written notice to each employee on at least a quarterly basis regarding the amount of accrued and unused sick time that is available for use by the employee.

These notices must be provided in English and, if applicable, any other language the employer normally uses to communicate with employees. The city has made model posters and individual notices (in English and Spanish) available online.

The city has also promulgated detailed rules regarding adopting or modifying sick leave policies, monitoring and calculating sick-leave accrual and use, and maintaining sick-leave records. These rules will require most employers to take some action right away. At a minimum, employers should prepare to distribute and post the new sick-leave notices, and review and update their existing sick-leave policies. Failure to do so could result in noncompliance and civil penalties payable to both the city of Portland and to the employee directly. Employers that have individual compliance questions should consult with employment law counsel.

Heidi Mason is an attorney in Jordan Ramis PC’s labor and employment law practice group. Contact her at 503-598-5504 or at heidi.mason@jordanramis.com.

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In June 2013, the U.S. Supreme Court opined in United States v. Windsor that Section 3 of the Defense of Marriage Act was unconstitutional. That section defined marriage as being between a man and a woman for purposes of federal law. The impact of this decision is far-reaching, especially when combined with same-sex marriage law changes at the state level. For employers, these changes affect:

• Employee federal income tax withholding;

• Family Medical Leave Act (FMLA) and Oregon Family Leave Act (OFLA) administration;

• Employee benefit plans subject to the Employee Retirement Income Security Act (ERISA); and

• Availability of health care subsidies under the Patient Protection and Affordable Care Act (PPACA).

Administration issues are particularly tricky for employers who operate in Oregon and Idaho, where same-sex marriage is prohibited by the state constitution. Complications arise because of the interplay between state and federal law and the fact that these states border Washington and California, where same-sex marriage is lawful.

Employee federal income tax effects

Before Windsor, employees in same-sex relationships were not permitted to file federal income tax returns jointly, regardless of whether they were married, domestically partnered, or in civil unions.

After Windsor, the IRS published Revenue Ruling , announcing a change in the agency’s position. Specifically, “individuals of the same sex will be considered to be lawfully married under the code as long as they were married in a state whose laws authorize the marriage of two individuals of the same sex, even if they are domiciled in a state that does not recognize the validity of same-sex marriages.” This is known as the “place of celebration” rule.

For example, an employee who lives and works in Portland travels to Vancouver, Wash., and enters into a lawful same-sex marriage on Dec. 1, 2013. Under Revenue Ruling 2013-17, the employee and spouse may file their federal income tax returns jointly for the year 2013 even though same-sex marriage is banned under the Oregon Constitution.

This applies only to same-sex couples who enter into lawful same-sex marriages. Couples in registered domestic partnerships, civil unions or other similar relationships are not “married” under federal law.

Employers should be aware of these nuances when handling requests to update employee marital statuses and withholdings on Form W-4.

FMLA and OFLA administration

Under the FMLA, eligible employees may take unpaid, job-protected leave to care for a spouse, child or parent suffering from a serious health condition. Post Windsor, the U.S. Department of Labor Wage and Hour Division revised its , defining spouse as “a husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides, including ‘common law’ marriage and same-sex marriage.”

Unlike the IRS, the Wage and Hour Division focuses its analysis on the employee’s place of domicile.

Continuing the previous example, the Oregon employee who lawfully marries in Washington may file joint federal income tax returns but may not be entitled to FMLA leave to care for the spouse’s serious health condition because the employee lives in Oregon – a state that prohibits same-sex marriage.

However, on Oct. 16, Michael Jordan, Chief Operating Officer and DAS Director for Oregon, sent a memo to all state agency directors advising them to recognize out-of-state same-sex marriages for purposes of administering Oregon state programs. This raises a question as to whether Oregon “recognizes” out-of-state same-sex marriages to the extent that FMLA coverage under the DOL’s updated interpretation is triggered.

For Oregon employers, OFLA adds another layer of complexity. OFLA permits eligible employees to take unpaid, job-protected leave to care for spouses and same-gender domestic partners. Whether an Oregon employee lawfully wed in Washington may use OFLA leave to care for his or her same-sex spouse (but not registered domestic partner) is an open question.

ERISA implications

ERISA is a federal law that sets the minimum standards for private industry benefit plans. On Sept. 18, the U.S. Department of Labor Employee Benefits Security Administration issued to provide guidance on the meaning of the terms “spouse” and “marriage” as applied to ERISA.

Unlike FMLA, the DOL follows the “place of celebration” rule for purposes of ERISA. In other words, a same-sex marriage should be recognized for ERISA benefits purposes if the marriage was entered into lawfully in a state where same-sex marriage is legal.

Affordable Care Act subsidies

Beginning Jan. 1, 2014, eligible employees may use tax credits to pay for health insurance premiums on state exchanges. Part of the tax credit eligibility formula is based on the employee’s family size and annual household income.

On Sept. 27, the Department of Health & Human Services Center for Medicare & Medicaid Services released on how the formula applies to employees in same-sex relationships. Specifically, a premium tax credit is available to an “otherwise eligible taxpayer with a same-sex spouse regardless of where the taxpayer resides, only if the taxpayer and his or her spouse file a joint return for the taxable year.” Employers should take this into account when strategizing plans to implement the PPACA.

The examples above provide an outline of what is known, but there are still many unanswered questions, such as whether an employer may concurrently deduct an employee’s OFLA and FMLA leave banks for time used to care for a same-sex spouse. Another unknown is how the new Portland sick leave rules will apply to same-sex spouses who are not registered as domestic partners in Oregon.

In sum, the changes to same-sex marriage laws affect employers in a variety of areas. These laws continue to evolve, making compliance challenging at best. For these reasons, consult competent employment law counsel before making changes to employee policies or benefits programs that are implicated by a person’s marital status.

Heidi Mason is an attorney in Jordan Ramis PC’s labor and employment law practice group. Contact her at 503-598-5504 or at heidi.mason@jordanramis.com.

Diane Lenkowsky contributed to this article. She is a law clerk in Jordan Ramis PC’s business law practice group, and a student at Lewis & Clark’s Northwestern School of Law.

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