Final Sick Leave Rules Published

December, 2015

By Ryan Orr, JD, Human Resource and Compliance Consultant
Cascade Employers Association
[email protected]

In the spirit of holiday giving, BOLI has (finally) provided us with the final rules for Oregon Sick Leave. For the most part, there are few substantial departures from the draft rules. However, there are a couple notable differences – and if you’ve already updated your policy, these differences may require further changes.

Call-in/Notification of Leave

The biggest difference is that under the draft rules, if an employee failed to follow an organization’s call-in policy and/or failed to properly give notice of leave, the organization could discipline the employee (for the absences and the violation of call-in/notification policy) and deny the use of sick leave. Now, an organization may not deny the use of sick leave or discipline the employee for use of sick leave. That means that the employee still gets to take the time off and get paid for it (if you are required to offer paid time.) It also means that the organization and its managers/supervisors cannot use the absence against the employee under its attendance policy or interfere/retaliate against the employee in any way for its use. You can, however, discipline the employee under your call-in/notification policies.

If you’ve already made changes to your policy to get in compliance with the law, this new provision of the rules may require additional changes. For instance, in the policies that Cascade has drafted, we have included the following statement at the end of the paragraphs about how much notice an employee must give to request leave:

“A failure to provide adequate notice of the need for foreseen/unforeseen leave may result in the denial of the leave request and disciplinary action.”

If you have a statement like this, you should change it as follows:

“A failure to provide adequate notice of the need for foreseen/unforeseen leave may result in the denial of the leave request and disciplinary action.”

Joint Employer

Some other major changes from the draft rules include clarifications to the joint employer rules. The draft rules simply stated that both employers in a joint employer relationship are responsible for administering the rules, and they left everyone wondering what that really meant. While there are still some things that are not clear under the joint employer rules, we do have some additional clarity.

First, the final rules reference FMLA’s rules for joint employer relationships. FMLA has a great deal of guidance and case law interpreting it, so presumably, BOLI will apply that guidance and case law to sick leave.

Second, we know that – while there are numerous situations that could create a joint employer relationship – employees that work with you through a temporary staffing agency or PEO are almost certainly going to be considered employees of both employers.

Third, the rules state that one employer will be considered the primary employer and another will be considered the secondary employer. This will be determined by looking at who has hire/fire authority, who has authority to assign/place the employee, and who handles the employee’s pay and benefits. Typically, a placement agency will be considered the primary employer, while a PEO will be considered the secondary employer.

Fourth, the rules – to a certain extent – explain the responsibilities of the primary and secondary employers. Primary employers are responsible for providing notices, providing sick leave, and maintaining benefits. Secondary employers cannot interfere or retaliate against an employee for taking leave, and they also must accept the employee back to work if the employer still needs the placement and the employee has not indicated that they do not wish to return to the placement.

However, there are still some things that aren’t clear, such as how to handle a temp-to-hire situation. Does an employee who has worked for you on a temporary assignment need to start over in terms of the 90-day eligibility requirement and accruals? Or do you need to track the employee’s time while they are placed with you, giving them time that they are eligible to use upon hire? If they do have time for immediate use, would you also draw down on that time if the employee took sick leave during the temporary placement?

Based on our conversations with BOLI, we think the safest course is to do the following:

  • Count all time worked on the temporary placement towards the 90-day eligibility requirement. Therefore, if the employee has been placed with you for at least 90 days, they will be immediately eligible to use sick leave upon hire.
  • While the employee is on the temporary placement, track the employee accruals of sick leave as though they were already working for you. While the placement agency will be responsible for paying the employee for any sick time, it will be important for you to track the accruals because this time will be available for them to use (assuming they’ve met the 90-day eligibility requirement) upon hire.
  • Also, track how much time the employee has taken for sick leave purposes while on temporary placement. You should be able to deduct this from any sick leave available to the employee upon hire.

BOLI intends to address this rule further over the course of 2016, so hopefully we will get some additional guidance. We will keep you updated as we learn more.

Other Provisions

A summary of the other significant provisions of the final rules are as follows:

  • The definition of medical provider has been synched with OFLA;
  • Employers who frontload may pro-rate based on hire date. While this provision is not new, the provided example is. For instance, if you frontload 40 hours of sick leave to all employees on January 1, 2016, and you hire a full-time employee on July 1, 2016, you need to frontload only 20 hours of leave upon hire. This seems odd because a full-time employee would accrue more than 20 hours over the course of six months based on the 1 for 30 accrual rate. However, despite this odd interpretation, it is clearly written into the rules, so employers can feel safe making this proration.
  • Employers may frontload for certain employees and accrue for others, so long as it is based on customary employee classifications and/or length of service.
  • If an employer’s number of employees fluctuates so that sometimes it is required to provide paid leave and other times unpaid leave, an employee’s right to take the time as paid or unpaid depends on the employer’s number of employees when the time was accrued. For example, if an employer has more 10 or more employees in January, and an employee accrues 4 hours of leave, that time will still be paid whenever the employee takes it, even if the employer has fewer than 10 employees at that time.
  • The rule provides examples of how to change from an accrual to frontload system. If you are on an accrual and change to frontload, you would need to frontload the difference between 40 hours (or whatever amount of sick leave that you choose to frontload) and what the employee has already accrued.

BOLI Interpretations

We received interpretations from BOLI on a couple provisions of the law that are unclear.

The first is that the statute says an employer may cap the total amount of an employee’s sick leave at 80 hours or the employer may cap annual use of sick leave to 40 hours. BOLI has acknowledged that the “or should not be there.” Therefore, it is acceptable to impose an absolute cap on sick leave of 80 hours and have a 40-hour annual limit on use. This means that even if an employee’s balance is 80 hours, you do not have to let them use more than 40 hours.

Second, there has been some confusion about whether an employer is required to carryover 40 hours of sick leave if they frontload. There is a provision of the statute that says to avoid carryover, an employer must (1) pay the employee for any unused hours of sick leave at the end of the year; (2) frontload the employee 40 hours for the next year; and (3) the employee must agree to waive his/her right to carryover. BOLI has taken the position that if an employer frontloads an employee at least 40 hours a year, it does not need to carryover any time, and it does not need to meet the three requirements listed above. Essentially it is use it or lose it.

Despite, BOLI’s position, it is advisable that you still follow the three requirements listed in the statute. BOLI’s position – while it makes a lot of practical sense – does not appear to be supported by the language of the statute. This is important because while BOLI is responsible for enforcing this law, employees can also bring a civil suit for sick leave violations, and their attorneys could make a persuasive argument that carryover must occur unless those three requirements are met.

In the coming weeks, we’ll be putting together a fact sheet to help you make sense of all the components of the sick leave law. Also, stay tuned for additional training sessions we will be hosting to help you break down the implications of the final rules and interpretations. We’ll also keep you updated if BOLI publishes any supplemental rules.

And of course, if you need any assistance figuring out how to comply with the law, give us a call!


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