During the conversation, Fallon shares all the details around the new Oregon Sick Leave Law, what employers may consider changing in their policies, how to track time, common traps employers will likely fall into as this law takes effect, and much more.
Learn more about Fallon Niedrist and JJH Law at www.jjh-law.com or contact Fallon at fallon@jjh-law.com
Brandon: Welcome to the HR for Small Business podcast! This is Brandon Laws and with me I have Fallon Niedrist, she is an Associate Attorney with JJH Law, they are located in Portland, Oregon. Fallon, it’s awesome to have you!
Fallon: Thank you so much for having me!
Brandon: So you are an expert in a lot of employment law, but today our topic is the Oregon Paid Sick Leave Law. Can you give us some history behind what this is and kind of how it came about?
Fallon: Sure. So the last couple years there’s been a growing concern and awareness that hourly workers especially, when they become sick, you know, it’s really financially burdensome or can be for those that take time off of work because they have the flu or a cold. And so a lot of us, particularly in cities, there’s been a growing movement to pass legislations and ordinances to protect this sick time for employees so they can feel like if I’m sick, I can take a day off work and I’ll get paid for it, it’s not going to harm me at the end of the month when I’m short on cash. So really it’s been a movement starting with the city level. Seattle passed an ordinance a few years ago, San Francisco passed an ordinance a few years ago to protect this sick time for employees so they don’t feel like they’re going to get short shifted at the end of the work week.
Brandon: Yeah, if I remember right, what I’ve heard, and to your point it started in Seattle, Portland adopted a law, and, Portland adopted a law—that was last year? Or it started in 2015?
Fallon: Yes, so they actually started working on the law in 2013 and it came into effect recently and that was kind of part of this city movement to protect workers that’s kind of been common on the west coast the last few years.
Brandon: And so what we’re talking about today, we’re talking about statewide now, is that correct?
Fallon: Right. And so when the city ordinance stuff passed, there were a lot of issues that came up almost immediately. For example, well what if I have an employee that works part of the time in Portland and part of the time out of Portland? How do I deal with that, like counting the hours they’re accruing for paid sick leave? So there’s a lot of problems right out the gate by just having a citywide law about giving your employees paid leave. So people were concerned about that and brought it to the state legislature and sure enough this last session the state legislature approved a statewide law that gets rid of those citywide problems that came from passing the ordinance.
Brandon: Yeah, and it probably makes it a lot more sense. I mean it’s easier to track probably statewide versus just citywide, I mean it’d probably be a tracking nightmare. Can you give us some perspective on the details of when this was actually passed, when it takes effect, maybe who it involves, all the kind of nitty gritty details about that?
Fallon: Sure. So the law passed with the last legislative session and it doesn’t come into effect until January 1st, so this gives employers a little bit of time to get caught up on what the law says, pass some policies, revisit existing sick time policies if you have them. Basically the coverage is really broad. Every employee is covered, no matter if you’re a
temporary employee, a seasonal employee, part-time, full-time. There are a couple minor exceptions for things like independent contractors or people who are in a work training program. So by and large almost every employee is going to be covered under this law.For employers, they kind of broke it down into a small employer category versus a larger employer category. And that distinction is if you’re a smaller employer you probably can’t afford to give your employees paid leave, so you’re just required to give your employees unpaid sick time. And if you’re a larger employer you have to do the paid sick time. That distinction is they still kind of maintain that the Portland versus the rest of the state of Oregon distinction. So if you’re a Portland employer, if you have 6 or more employees you’re required to give paid sick time. If you have less than 6 employees, unpaid sick time. For the rest of the state, that cutoff line is ten employees. 10+ employees, paid sick time; less than 10 employees, unpaid sick time.
Brandon: And does this law override the previous Portland law? Or does that one still stay in effect where it’s actually the six employee cutoff?
Fallon: So this law actually preempts the Portland Paid Sick Leave Ordinance, so that’s not going to apply anymore. But it just didn’t maintain that distinction for Portland employers of the six employee cutoff rule.
Brandon: Are there any other details about the size of employer or is it just employee size to where the law is either paid or unpaid or is that the only kind of detail that employers need to pay attention to?
Fallon: So just the employee side. There are little distinctions on how do you count employees, so that’s something. If you’re right on the cusp, go ahead and contact your legal counsel about figuring out if you make the ten employee or six employee cutoff line because it’s a little detailed calculation to figure that out. But really the employer should focus on how many employees you have in your workplace at any one time.
Brandon: I know this is getting pretty detailed, but what happens if throughout the year you fluctuate between the threshold where it’s unpaid or paid? How do you go back and forth between that?
Fallon: So there’s a rule in the law that kind of talks about how you calculate the employees and it’s based on the average number of employees that you have working throughout, I believe it’s the previous 20 weeks of the year. So if you have 9 employees and you just get to 10 or you’ve had 9 employees for the last 20 weeks on average you’re still in the 9 employee category. But again it can get a little complicated when you’re counting it and it’s always good to double check with legal counsel if you’re not sure.
Brandon: Can you kind of define how people may use this sick leave or sick time as we’re calling it? I’m sure there’s reasons that employees would want to use this time, but maybe give some kind of general definitions of how people would use it.
Fallon: Sure. So it’s actually a really, really broad use allowance for the paid sick time. If an employee needs to take care of their own mental or physical illness, injury, or health condition, that’s covered. If the employee needs to care for a family member and their mental or physical condition, that’s also covered. Generally, reasons set forth in the Oregon Family Leave Act for things like you need to care for somebody with a serious health condition or your own serious health condition, that’s going to be covered. Also, leaves under the domestic violence leave laws in Oregon, so if you need to go to a hearing about a protective order, that’s going to be covered under the law. And finally if there’s something called a public health emergency, and that’s kind of exactly what it sounds like, like if somebody’s declaring like, don’t leave your house because there’s a contagious illness that’s spreading, anything related to that is also going to be covered. So the use is really pretty broad, anything that you can think of that might be, you know, I’m sick.
Brandon: If I have a cold and I don’t feel like going to work, I could use this time. Is that pretty much what you’re saying?
Fallon: Yes, that’s correct. So there are limitations on that. These types of laws are always a balance between employee interest versus employer interest. So an employer can ask an employee to verify their leave, particularly if the employee has gone 3 or more consecutive days, or if the employee is starting to look like they’re just taking leave on a Friday or the beginning or end of a long weekend and that employer suspects abuse, those are situations where an employer can ask the employee to verify. But generally speaking if you have the flu and you stay home, you’re covered and protected under the law.
Brandon: So that’s the distinction, it’s 3 days in a row? That you could verify? As an employer, you can’t verify it if it’s under 3 days?
Fallon: Unless it’s a situation where you’re suspecting abuse of the leave.
Brandon: Ok. And that would probably require some documentation over a period of time if you suspected abuse, otherwise how do you, otherwise it’s probably not warranted.
Fallon: Yeah, exactly. So in those situations where an employer suspects abuse it’s always good to have documentation. It’s good to have enough information to set up a pattern
of practice of this employee using leave in such a way that maybe they’re not actually sick. And again that’s something that if you kind of suspect that situation, it’s always good to talk to either the Bureau of Labor & Industries or an HR professional or legal counsel to kind of get some guidance on that.Brandon: Could you talk about how this starts accruing for an employee? Maybe when the timing starts, like when they’re hired or right away or how does all that work with accrual?
Fallon: Sure. So this is a law where the employee actually starts accruing their paid or unpaid leave on day one. The minute they walk through the door they’re accruing their leave. The employee is not entitled to take that leave until the 91st calendar day of their employment. So they get about 3 months where they’re just accruing it, it’s sitting in a bank, but they’re not allowed to take it yet. There’s actually an alternative path that an employer can take though, and that’s just frontloading 40 hours of sick time the minute the employee starts work or the beginning of the calendar year. And that kind of administratively is a little easier for the employer so you don’t have to keep track of the accrual rate over time.
Brandon: What about carryover; how does that work?
Fallon: So again there’s kind of two tracks for carryover that an employer can think about. The first is, and this is kind of the default, that an employee can carryover up to 40 hours of unused but accrued sick time from one year to the next. An employer can have a policy saying that the employee’s not allowed to accrue more than 80 hours of sick time in any one year and they’re not allowed to use more than 40 hours of sick time in any one year. So you can kind of manage those carryovers without having too much paid or unpaid sick time for your employees.
The other alternative is the employer and employee can agree that if you have paid leave the employer pays it out at the end of the year, they’re not allowed to carry it over so long as the employer frontloads sick time at the beginning of the next calendar year. Or if it’s unpaid time that you just immediately give them the 40 hours starting the next calendar year. So you kind of have the frontload option or you have the carryover option.
Brandon: That’s pretty interesting. Are there, well we can probably talk about this later too, but are there either a flowchart or some sort of list that sort of describes all of this in a very simplistic format for employers somewhere?
Fallon: I don’t believe there is yet. I know that the Bureau of Labor & Industries is going to be the agency that’s passing regulations regarding this rule. Usually the Bureau of Labor & Industries is very good at providing charts and kind of a frequently asked questions. I don’t think they’re there quite yet with getting the regulations straightened out. So I would stay tuned to the Bureau of Labor & Industries to kind of get an easy flowchart or easy frequently asked questions for employers.
Brandon: Talk about how employers are currently managing sick time and paid time off, because those are very different things. I know a lot of employers are having the PTO bank, they do already have a policy in place where everything’s just kind of in the PTO. But how, when a law like this comes into play, how does it all work when you have an existing policy?
Fallon: That’s a really great question and I think it’s a question a lot of employers are wrestling with right now because, by and large, most employers have some kind of policy in place about employees taking time off. So the paid sick time policy is really only going to affect a small percentage of employees who have no access to paid sick time. The rest of it is employers trying to get their current policies to comply with this new rule. And so, the way that the law works is if an employer has an existing sick leave policy, paid vacation policy, paid time off policy, and the language is substantially equivalent to or more generous than the paid sick time law, it meets the minimum requirements, then you kind of
just can follow your own policy without having to worry about the paid sick leave law. But trying to figure out what that ‘substantially equivalent standard’ means can be a little tricky. So for example, a lot of employers will give an employee, say, 50 hours of paid time off per year, but it, say, accrues at a slower rate than what’s required by the law. The law required employees to accrue one hour of sick time for every 30 hours worked. Well, we don’t really know if they’re providing more sick time than the law requires, but if they’re accruing it at a slower rate, we’re not really sure if that means ‘substantially equivalent’ or not. So there’s a little bit of a weighing and kind of measuring your level of risk in determining whether or not you think your policy is substantially equivalent too. And really the only policies that are going to fall in this kind of weighing category are kind of on the edge of complying with the paid sick time law.Brandon: Do you think employers who have just a general, like my employer Xenium, we have just a general PTO bank we don’t have separate sick time, do you think employers like us who have just a PTO bank would actually go backwards to separate vacation and sick time policies?
Fallon: So I know that that is not what I would recommend to any of my clients. I think that the PTO policy is pretty much the best policy in that you don’t have to worry about tracking why the employee is taking time, you just give them this bank of time and they can take it for whatever purpose they want. And it’s really streamlined for the employer and it’s really streamlined for the employee, too. So I always recommend to move away from the separate banks of time to a combined PTO time. And so that PTO time, even if you’re only providing 40 hours total of PTO and the accrual rates match up with the paid sick time, that’s going to be sufficient to kind of exempt yourself from a paid sick leave law. Even though they’re only getting 40 hours total, that’ll also include their vacation time and you don’t have to worry about their vacation time separate from sick time if you have a PTO policy. So it works a little more streamlined for employers to just have the one type of policy.
Brandon: And I’m sure you’d agree with me that this probably deserves to be on a case-by-case basis. So, for this podcast, if someone’s listening, don’t take that as a blanket approach, but what I would probably say is that, what I hear you saying at least, is that the PTO policy is probably easier to track and as long as it’s deemed ‘substantially equivalent’ then that’s probably your best route. Is that what you’re kind of saying?
Fallon: Yeah, I think that that’s correct. And like you said, it’s a case-by-case approach and it depends on kind of your employer needs, your internal needs, whether or not the PTO approach is going to work for you, so again, these are the types of questions that if you’re thinking about changing your policies, of course always talk to your HR professionals, your legal counsel, to kind of get the best advice for your specific situation.
Brandon: As it related to tracking the sick time, PTO, whatever it is that an employer wants to do, and then as far as communicating what an employee gets, what is the employer actually responsible for as it relates to this law?
Fallon: So the employer is required to provide employees with written notification at least quarterly of the amount of accrued and unused sick time they have available. Usually what I’ve seen employers do is they just incorporate that information onto pay stubs. It’s easier to just add a line item rather than having a separate quarterly document to send out and prepare. But the requirement, the bare minimum is at least quarterly you have to let your employees know what they’ve accrued and what they haven’t used. And also as
the employers are required to give written notice of the requirements of the law in accordance to the rules set about by the Bureau of Labor & Industries. Those rules haven’t been adopted yet but it’s probably going to be similar to the myriad of posters that you have to post in the break room. You’ll have another poster to put in the break room about the sick time law.Brandon: If you’re going to look into the future, when this law’s in effect, and you were to say that employers will likely, some employers, would do some things either knowingly or unknowingly that are unlawful as it relates to this law, what do you think some of those things, those little traps, would be?
Fallon: I think the biggest trap for employers is going to be, especially if the employer is not used to having to handle protective leave situations is that employers are not allowed to consider leave taking under the paid sick time law against the employee for things like attendance policy reasons. So say Tom has had 10 sick days in the past month, five of those days were covered by the sick time law. The employer can only look at the other five that weren’t covered to see if he’s in violation of their attendance policy. And I think for a lot of employers it’s hard to separate, like, excluding protected leave time from the analysis of whether or not Tom is coming to work enough. That’s something you have to keep in mind is that any time you have a protected leave situation, that doesn’t come into your analysis in determining whether you need to discipline your employee if they’re following expectations.
Other things are pretty standard. Employers can’t deny or interfere with the time, they can’t refuse to pay if they’re required to have paid sick time. They’re pretty standard unlawful employment practices that have protections there.
Brandon: As we wrap up, any other thoughts or advice you want to give employers for those that are listening?
Fallon: I think my biggest advice for employers right now is that now is the time if you have a policy to take a look at it and really critically analyze it and see if it’s going to meet the law requirements and if you don’t have a policy, find an HR professional or a lawyer to talk to get the correct policy in place. And don’t wait until the last minute; don’t wait until December 30th or 31st to get up to speed on this law. It can be a pretty easy transition and implementation if you start working on it now. So yeah, double check your policies, get a policy in place sooner rather than later.
Brandon: Awesome advice. So Fallon, with that, what are some really good ways somebody could get in touch with you?
Fallon: So you can always visit our website, it’s www.jjh-law.com and you can always send me an email if you have any questions, it’s fallon@jjh-law.com.
Brandon: We’ll make sure to put some links up to it for sure. Fallon Niedrist, thank you so much for being part of the podcast! I’m sure employers in Oregon are definitely impatient or anxious about this law and I think you definitely cleared it up quite a bit!
Fallon: My pleasure Brandon!