Oregon’s New Sick Leave Law – The Basics

Kevin Anderson Regulations, Transportation

On January 1, 2016, Oregon became the fourth state to require employers provide paid sick leave to employees.  Oregon’s new sick leave law applies to all Oregon based employers and to all employers wherever they are based if they have an employee or employees who work in Oregon. The following is intended to give you basic awareness of the new law and its main requirements.

The new law permits use of sick time to care for and/or or help seek diagnosis and treatment (including preventative) of a family member with a mental or physical illness, injury, or health condition.  In addition, sick leave may be used to deal with the death of a family member.  The statute lists spouses, children, parents, grandparents, and grandchildren as covered family members. The regulations provide a definition of spouse, and expand the definitions of child and parent.  As a result, the statute and regulations define “family member” broadly as an employee’s spouse, same-gender domestic partner, custodial parent, non-custodial parent, adoptive parent, foster parent, biological parent, step-parent, parent-in-law, a parent of an employee’s same-gender domestic partner, an employee’s grandparent or grandchild, or a person with whom the employee is or was in a relationship of in loco parentis. “Family member” also includes the biological, adopted, foster child or stepchild of an employee or the child of an employee’s same-gender domestic partner. An employee’s child in any of these categories may be either a minor or an adult at the time qualifying leave pursuant to these rules is taken.

Generally stated, employers must provide a minimum of 40 hours (5 days) of sick leave per year to each employee. The employee accrues sick leave at the rate of one (1) hour for every 30 hours worked or 1-1/3 hours for every 40 hours worked. Employers can either grant sick leave on an accrual basis or by “front-loading” sick time by giving the employee a certain number of hours of sick time as soon at the employee becomes eligible to use sick leave and on the first day of the immediately subsequent year without regard to an accrual rate.

Employers with 10 or more employees working anywhere in Oregon must provide paid leave time. Employers located in Portland must provide paid sick time if they have six (6) or more employees working anywhere in Oregon. An employer is “located” in Portland if it maintains any office, store, restaurant or establishment in Portland. Non-Portland employers with less than 10 employees, and Portland employers with less than 6 employees must provide unpaid sick time.

For employees that are entitled to paid sick leave, the law requires them to be paid at their “regular rate of pay.”  However, employees need not be paid for lost commissions, shift differentials, or overtime.  For drivers that are not paid on an hourly or salary basis, but rather are paid by the mile, employers may pay them a previously established regular rate of pay, but that rate of pay must be equal to at least the minimum wage.

Nothing in Oregon’s Sick Leave Law requires an employer to compensate an employee for accrued unused sick time upon the employee’s termination, resignation, retirement or other separation from employment.

Each employer must provide written notice to each employee explaining Oregon’s Sick Leave Law.  BOLI has prepared the required written notice to be provided to employees, which can be found at: http://www.oregon.gov/boli/WHD/OST/Documents/Sick-Time-Poster.pdf

Each employer must also have a written Sick Leave Policy.  The policy must adhere to the Oregon Sick Leave Law and, in this regard, the employer has the following options that must be decided upon:

  1. Whether to use the accrual method or “front-load” method for granting sick time.
  2. Employees can carry over up to 40 hours of sick time from one year to the next; however, employer may limit carryover hours to 80 or limit an employee from using no more than 40 hours of sick time in a year.
  3. Deciding how to mesh the employer’s other paid time off policies (i.e. vacation and other personal time off) with the Sick Leave Law. Meshing these policies must result in a policy that is at least substantially equivalent to the Sick Leave Law requirements.
  4. Whether an employee is authorized to use accrued sick time prior to the 91st calendar day of employment.
  5. Whether the employer will allow the employee to make-up used sick time by working additional hours or shifts; however, the employer may not require this.

The foregoing is a summary of the major provisions and requirements Oregon’s Sick Leave Law. There are other sections of the statute and the regulations that deal with other specific issues such as determining hours worked, calculating the regular rate of pay, calculating the number of employees, dealing with jointly employed employees, details on how to provide front-loaded sick time, determining hours worked when recording hours worked is not required, dealing with employees with both unpaid and paid sick time, application of the law to new businesses, calculating sick time for shifts of indeterminate length or on-call shifts, verification procedures, and determining whether an employee subject to a collective bargaining agreement is exempt.

Many businesses will be caught unaware of their obligations under Oregon’s Sick Leave Law. Please take some time to evaluate how the new law will apply to your company and protect your business by implementing policies and procedures to ensure compliance with the law. Give us a call if you have any questions, and we can help with your evaluation and implementation if necessary.