On June 12, 2015, the Oregon legislature passed Senate Bill 454, legislation that will require most employers with 10 or more employees in Oregon to provide employees with up to 40 hours per year of paid sick leave.  As discussed below, Portland employers with six or more employees already must provide sick leave.  Oregon employers with fewer than 10 employees (or six in Portland) will be required to provide up to 40 hours per year of unpaid sick leave.  Once the new measure is signed into law by Governor Kate Brown as expected, Oregon will join California, Connecticut, and Massachusetts in enacting state-wide paid sick leave legislation.

The new sick leave law applies to virtually all people working in the state:  full-time and part-time hourly, salaried, commissioned and piece-rate employees, as well as home care employees who provide hourly or live-in care to the elderly or disabled and who receive money from the Oregon Department of Human Services.  Only independent contractors, employees who receive paid sick leave under federal law, participants in certain work-training or work-study programs, and children employed by their parents, are excluded from coverage.

Passage of sick leave legislation applicable to all Oregon employers follows local government initiatives in Portland and Eugene.  The Portland ordinance, enforced since January 1, 2014, requires employers of six employees within Oregon to provide paid sick leave, and employers with less than six employees to provide unpaid sick leave.  That provision of the Portland ordinance will remain in effect.  Portland employers must comply with the new state law in all other respects.  However, the City of Eugene’s sick leave ordinance, which was to go into effect on July 1, 2015, will now be preempted, meaning Eugene employers must comply with the state law only.  The new law prohibits any other local government from imposing different sick leave requirements on private employers and instead requires adherence to the new state law. 

Under the new Oregon law, paid sick leave will immediately begin to accrue for current employees on January 1, 2016 at a rate of one hour for every 30 hours of actual work.  Employees hired after that date will begin accruing sick leave immediately upon hire (although they cannot begin using it until the 91st calendar day after they begin work).  

Sick leave pay will be based on the employee’s regular rate of pay.  Employees paid on a commission or piece-rate basis will receive sick leave pay at the current Oregon minimum wage.  Salaried employees exempt from overtime are presumed to work 40 hours per week for accrual purposes unless the actual workweek of the employee is less than 40 hours, in which case sick time accrues based on the actual workweek of the employee.

Oregon employers will not be required to pay out accrued sick leave balances when an employee resigns or is terminated, but any accrued sick leave must be restored to an employee who is rehired within 180 days.  An employee will not lose his or her accrued sick leave if transferred to another Oregon facility of the same employer or upon the sale of the business to another employer.

Employees are permitted to use accrued sick leave in one-hour increments, which for the most part tracks allowable incremental time uses under the Oregon Family Leave Act (“OFLA”).  These uses include leave taken for their own or a family member’s illness, injury or health conditions and/or medical diagnosis.  Paid sick leave may also be used for any of the following reasons:

• To care for an infant or newly adopted or foster child;
• To care for a child who needs home care;
• To make funeral arrangements, attend the funeral or grieve for a family member who has died;
• To seek legal or law enforcement assistance to ensure the health and safety of the employee or the employee’s dependent;
• To obtain, or to assist a dependent in obtaining counseling from a licensed mental health professional or services from a victim service provider, or to relocate or take steps to secure an existing home because of an experience of domestic violence, harassment, sexual assault or stalking; or
• To deal with situations in which the employee is excluded from the workplace for health reasons or because of the closure of the employee’s place of business, or closure of the school or place of care of the employee’s dependent, by order of a public official due to a public health emergency.

The new Oregon law also provides that employers may require employees to make reasonable attempts to schedule sick leave when it is least disruptive to the employer and to provide reasonable notice of their intention to take sick leave when that leave is foreseeable.  The employer may also require documentation only for periods of sick leave of three days or more.  Under the new law it will be illegal to deny, interfere with or retaliate against an employee who has taken sick leave as provided under the statute.

The Commissioner of the Bureau of Labor and Industries (BOLI) is charged with adopting rules for implementation and enforcement of the new law. 

Employers should examine their sick leave policies now to determine whether they will need to make changes to bring them into compliance before the law takes effect on January 1, 2016.