As expected, Oregon has enacted a mandatory paid sick leave law, making it the fourth state to do so. The law requires employers with more than 10 Oregon employees to provide those employees with up to 40 hours of paid sick leave per year beginning in 2016, except that employers in Portland must offer the paid sick leave if they employ more than six employees. Those with less than 10 have to offer the sick leave, but it can be unpaid. The new law applies statewide and preempts similar city ordinances such as those in Portland and Eugene. In fact, Eugene is set to repeal its law upon passage of the statewide law. Unlike the Portland ordinance, the state law applies to both public and private employers.

The uses of sick leave are essentially the same as what the Portland ordinance had provided, including: sick leave, medical appointments, all Oregon family leave reasons, domestic violence and crime leave and for public health emergencies that preclude the employee from working. It also allows employees to donate to other employees who need it for eligible purposes.

Like the Portland ordinance, the sick time begins to accrue at the start of employment at the rate of one hour for every 30 hours worked (or 1-1/3 hours for every 40 worked). The time off cannot be used until the 91st calendar day of employment. The law does not require cash-out of unused sick time at termination. For employees who do not use all of their sick time in a given year, the employer is required to carry over unused sick time of up to 40 hours (but can  cap the total earned at 80 hours accumulation) or if mutually agreed, there can be a year-end cash out of unused sick time. Quarterly notice to employees of the amount of sick time they have available is also required. Employees who leave before their 91st day and are reinstated within 180 days must be credited with their prior accruals. Employers who have paid time off (PTO) programs with at least these amounts of time do not have to provide additional time off so long as their policies permit use for all purposes in the law.

The law contains many other details and directs the Bureau of Labor and Industries to implement further regulations to administer and enforce the law. See http://www.boli.state.or.us.

Notice of the law must be provided to employees and BOLI will develop a template for the notice and likely a poster explaining the law soon.

What Should Employers Do??

It is critical that employers reevaluate their vacation, sick and PTO policies to ensure compliance with the new law starting in 2016. Most employers’ existing policies likely do not match the required accrual rates and carry-over requirements. Employers may be able to expand their existing PTO policies to accommodate the requirements of the new law. Employers who have separate vacation and sick leave policies may wish to consider merging the two and establishing one PTO bank instead of depending on the employer’s particular circumstances.