Oregon Paid Sick Leave Law Enacted

Author: Rena Pirsos, XpertHR Legal Editor

June 25, 2015

On June 22, Oregon became the fourth state (behind Connecticut, California and Massachusetts) to enact a paid sick leave law. Employers fortunately have time to become compliant as the law does not take effect until January 1, 2016, and most civil penalties applicable to employer violations of the law will not be assessed until after January 1, 2017. Penalties associated with provisions prohibiting retaliation and employer absence control policies will not be assessed until after January 1, 2016.

The new law also prohibits local governments within Oregon from creating their own sick leave requirements for private employers. This will alleviate the burden of employers having to comply with multiple sick leave laws once January 1 rolls around.

Who's Covered?

All employers (excluding the federal government) with one or more employees located anywhere in Oregon are required to comply with the new law. Covered employees include (but are not limited to):

• Full-time and part-time employees;
• Individuals paid on a piece-rate basis;
• Individuals paid on an hourly, salary or commission basis; and
• Home care workers who provide hourly or live-in care to the elderly or disabled.

Certain additional types of employees are specifically excluded.

Accrual of Leave

The new law permits employees to accrue a maximum of 40 hours of sick time per year, at the rate of at least one hour for every 30 hours worked, or one and one-third hours for every 40 hours worked. Employees may begin to accrue leave on January 1, 2016, or when they first start working for an employer, whichever date is later. However, employees may not use accrued sick time until they have completed at least 90 days on the job.

In addition, while employees can carry over up to 40 hours of unused sick time, an employer can have a policy that:

• Limits an employee's accrual to no more than 80 sick time hours; or
• Limits an employee's use of sick time to no more than 40 hours in a year.

To Pay or Not to Pay?

An employer's size determines whether paid or unpaid sick leave must be provided. For example, the law requires employers with 10 or more employees to provide up to 40 hours of paid sick time per year, and employers with fewer than 10 employees to provide up to 40 hours of unpaid sick time per year. However, an employer with a location in Portland must provide paid sick leave if it has at least six employees anywhere in the state.

Also, an employer must pay sick pay at an employee's regular pay rate. Employers are not required to pay out unused, accrued sick time on termination of employment.

Qualifying Reasons

Oregon's new law broadly permits employees to take leave for reasons other than their own illness. Employees will be able to take leave:

• To attend to the needs of a qualifying family member;
• For school or workplace closures;
• For reasons related to domestic violence, sexual assault or stalking;
• To care for an infant or newly adopted child; and
• For the bereavement of, or to make funeral arrangements in relation to, a family member's death.

What to Watch Out For

Employers need to be wary of certain situations under the new law, such as the following (not an exhaustive list):

• Denying or interfering with legitimate sick leave requests;
• Requiring employees to find a replacement worker or work a different shift to make up for any leave time;
• Requiring documentation for sick leave lasting less than three days;
• Failing to conspicuously post a notice describing employee rights under the new law.

According to Amy L. Angel of Barran Liebman LLP "The silver lining of the new law is that it preempts local governments in Oregon from setting any sick leave requirements, which means that as of January 1, 2016, Portland's Sick Time Ordinance and Eugene's Sick Leave Ordinance will no longer be in effect, leaving employers to focus on just the Oregon statewide requirements." 

Employers should start reviewing their paid time off, vacation or other paid leave policies to determine whether they want to create a paid sick time policy or amend existing policies to comply with the new law. In addition, managers and supervisors should be clearly informed of the law's requirements, especially regarding notice and retaliation.

The Oregon Bureau of Labor and Industries plans to issue a poster and notice template for employers' use.