Exit interviews are a very useful tool and can provide valuable information to an employer to help avoid future claims and improve employee retention. They are also the perfect time to provide a departing employee with their final paycheck in compliance with Oregon’s tight timelines.

Exit interviews

The structure of exit interviews will differ depending on whether the separation results from a voluntary (i.e., the employee resigns) or involuntary (i.e., the employee is fired or laid off) termination. When an employee resigns voluntarily, an exit interview is an opportunity to obtain feedback from the departing employee on things the employer is doing well and things that can be improved upon. Additionally, an exit interview is a good time to confirm the reason the employee is leaving and assess whether the employee is harboring any grievances against the employer regarding unfair or illegal treatment. Taking time to meet with the employee and discuss these things during the exit interview can help avoid possible future claims from the departing employee.

In the case of an involuntary termination, an exit interview is not only an opportunity to tell the employee that their employment is ending, but also to provide them with a clear and concise explanation of the reason(s) why. These reasons should also be clearly documented in the employee’s personnel file, along with any information or other documentation supporting the decision to terminate the person’s employment (e.g., conversations with the employee regarding performance concerns, performance improvement plans, etc.). It is important that the reasons given at the time of termination match the reasons the employer would provide if they were defending a wrongful termination or other employment-related claim. This does not mean that the employer needs to provide every detail and consideration that went into the decision to terminate the employee. Instead, it is a good idea to keep the meeting brief and to the point, while still being clear but accurately communicating the basis for the separation.

Final paychecks

In Oregon, there are strict timelines regarding final paychecks. Generally, employers are required to pay an employee that is involuntarily terminated by the end of the next business day. The final paycheck cannot be mailed unless the employee requests it (and when an employee does request that their check be mailed, the employer should have the employee make the request in writing). Most of the time this means an employer should have the employee’s final paycheck ready prior to the termination meeting.

The requirements are different when an employee voluntarily terminates their employment. For example, if an employee quits with less than 48 hours’ notice (not including weekends or holidays), their final paycheck is due within five business days, or the next regular payday, whichever is sooner. However, if an employee quits with at least 48 hours’ notice, their final paycheck is due on their last day of employment; if that day is a weekend or a holiday, the final paycheck is due the next business day.

Failure to pay an employee their final paycheck on time can result in the employer owing the employee penalty wages equal to eight times the employee’s regular rate of pay for each day the employee goes unpaid, up to a maximum of 30 days. However, if an employee provides written notice to the employer that they are still owed wages, employers can limit the amount of penalty wages owed to 100 percent of the unpaid wages if they pay the employee the amount owing within 12 days of receiving the employee’s notice. There are some exceptions to this rule. Further, employers who intentionally fail to pay an employee’s final wages may be subject to a $1,000 civil penalty plus costs, interest, and attorney’s fees.

In addition to the standard permitted deductions applicable to other paychecks, an employer may deduct from an employee’s final paycheck for a cash loan to the employee if (1) the employee voluntarily signed a loan agreement, (2) the loan was for the employee’s sole benefit, and (3) the amount of the deduction at termination does not exceed the amount permitted to be garnished under state law.

Finally, Oregon employers are not required to pay an employee for any unused vacation time or sick leave. Whether an employee’s final paycheck includes unused vacation, sick leave, or other types of paid time off depends on company policy and past practices. If the employer’s policy is silent on whether vacation is to be paid in a final paycheck, the best practice is to pay it.

Missy Oakley is an attorney with Barran Liebman LLP. She represents employers in a variety of employment matters. Contact her at 503-276-2122 or moakley@barran.com.

Becky Zuschlag is a law clerk with Barran Liebman LLP. She partners with attorneys in employment, labor relations and benefits practices. Contact her at 503-276-2151 or bzuschlag@barran.com.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the authors and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither author nor the 91ÊÓƵ guarantees the accuracy or completeness of any information published herein.

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The hustle and bustle of the holiday season is upon us, and the new year is right around the corner. With several employment law updates scheduled to take effect, Oregon employers can ring in 2023 in compliance by making (and keeping) these top workplace resolutions.

Paid Leave Oregon payroll deductions & notice poster

Contributions for Paid Leave Oregon start Jan. 1, 2023. The program is funded by payroll taxes. Employees pay 60 percent of the contribution rate, while employers with 25 or more employees pay 40 percent of the contribution rate; small employers, or those with fewer than 25 employees, are not required to contribute but they still must withhold and submit the employee portion of contributions with their payroll reports. The contribution rate for 2023 is 1 percent. All covered employers, regardless of size, are required to post the model notice poster at each work site (and provide it electronically or by mail to any remote workers) by Jan. 1, 2023. The poster is available for download and print in 11 languages from the Paid Leave Oregon website.

Earned Income Tax Credit

Employers are required to notify their employees about the Earned Income Tax Credit (EITC).  The EITC is a federal and state tax credit for certain employees making up to $59,187 in 2022. At a minimum, the EITC requires employers to provide employees with written notice of the tax credit along with their W-2 form each year. The notice can be sent by regular or electronic mail, delivered by hand, or via any electronic manner used to provide the employee’s federal W-2 form and must include information on the EITC website from the Oregon Department of Revenue and the IRS. To help employers meet these notice requirements, the Oregon Bureau of Labor & Industries (BOLI) provides sample text that employers can use. The sample text as well as more information on the EITC can be found on BOLI’s EITC webpage.

Employee agreements

Earlier this year the Oregon Legislature passed SB 1586, which amended the Oregon Workplace Fairness Act (OWFA). These amendments take effect on Jan. 1, 2023. As amended, the law now applies to agreements with former employees, and not just current or prospective employees. Previously, the OWFA restricted employers from requesting – though the employee was free to request – confidentiality, non-disparagement, and no-rehire provisions in both settlement and separation agreements where employees claimed discrimination under certain state statutes. The amendments expand these restrictions to prohibit employers from requesting confidentiality with respect to the amount of or fact of any settlement unless the employee requests such provision. The amendments also require that, in addition to the settlement or separation agreement, employers must provide employees with a copy of the employer’s OWFA policy. Now is a great time for employers to review any nondisclosure/confidentiality, non-disparagement, or no-rehire clauses in employment, settlement, separation, and severance agreements to ensure compliance with these changes.

Job postings

Beginning Jan. 1, 2023, amendments to Washington’s Equal Pay and Opportunities Act go into effect. They create additional wage disclosure obligations for job postings that may be filled by Washington-based employees. Employers with 15 or more employees must provide a wage scale or salary range, plus a general description of all benefits and other compensation to be offered to the hired applicant. This is important for Oregon employers as well since the Washington State Department of Labor & Industries recently clarified that this requirement applies to postings for jobs than can be filled by Washington-based employees, including remote workers.

Handbook updates

As a best practice, employers should update their employee handbooks whenever there are changes in the law that impact a handbook policy (such as Paid Leave Oregon). In addition, employers should review all other handbook policies to determine whether any policies need to be revised or removed and whether any new policies should be added. Finally, to ensure multistate compliance, employers with employees in more than one state (including remote employees) should consider whether they need to add any state-specific addenda to capture differences in state and local law.

Missy Oakley is an attorney with Barran Liebman LLP. She represents employers in a variety of employment matters. Contact her at 503-276-2122 or moakley@barran.com.

Becky Zuschlag is a law clerk with Barran Liebman LLP. She partners with attorneys in employment, labor relations and benefits practices. Contact her at 503-276-2151 or bzuschlag@barran.com.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the authors and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither author nor the 91ÊÓƵ guarantees the accuracy or completeness of any information published herein.

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