Proposed Changes to Oregon’s Sick Leave Rules Published

August, 2016

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

On August 23, 2016, BOLI issued a notice of proposed rulemaking to make some changes to the Oregon Sick Leave law rules. The proposed changes can be found here. The most substantial changes were made to the calculation of the regular rate of pay and the joint employer rules, but there were a few other significant changes.

Here is a summary of the proposed changes:

  • It adds the statutory definitions of “employee” and “employer” to the rule. It also restates the rule and gives examples on reinstating sick leave for an employee who is rehired within 180 days. Neither of these changes to the rule should affect or change an organization’s policies or practices that are already in compliance.

  • The rule clarifies that individuals who do not meet the definition of “employee” are not required to be counted in the employee count for determining whether sick leave is paid or unpaid.

  • It changes the way an employee’s regular rate of pay is calculated. Currently, the regular rate of pay is calculated based on the employee’s rate of pay in the workweek in which the leave was taken. The proposed rules state that the regular rate of pay is based on the pay period in which leave is taken.

    Additionally, if an employee has multiple rates of pay, and the rate of pay the employee would have earned when he/she used sick leave is unknown, the employer must determine the regular rate using a weighted average of the employee’s rates of pay during the pay period in which sick leave was used. This is a change from the existing rules where the regular rate is calculated based on the prior pay period.

  • Under the existing rules, employers and piece-rate, commission, and fee-for-service employees may agree on a compensation rate for sick leave that is at least minimum wage, and if no agreement is made, the default rate of sick leave compensation for these employees will be minimum wage.

    Under the proposed rules, the employer must add together the employee’s total compensation and divide it by the total hours worked to calculate the regular rate of pay. The regular rate of pay must still be at least minimum wage.

  • The proposed rules add the following: “In the event an employee paid multiple hourly rates or on a piece-rate, fee-for-service, or commission-only basis uses sick time in a pay period in which no work is performed, the regular rate of pay for the pay period during which the employee last worked will be used to calculate the regular rate of pay to be paid for sick time.”

    This clause would apply when one of these types of employees uses sick time for all his/her scheduled work in a pay period, thereby performing no actual work. The regular rate of pay would then be calculated based on the last pay period where the employee actually performed work.

  • The proposed rules make some substantial changes to the existing joint employer rules. The proposed rule clarifies that the secondary/client employer is responsible for sick leave only during the time where the employee is actually placed with the secondary/client employer, even if the employee has been employed by the primary/staffing employer for a longer period of time.

    For instance, if the employee is employed by the staffing agency from January through December, and with the client employer from September through December, the client employer is jointly responsible for the provision and payment of sick leave only from September through December. This scenario was implied by the existing rule, but this proposed rule provides a welcome clarification for this situation.

  • The proposed rule also clarifies that a jointly employed employee must work for the secondary/client employer for at least 90 days before the secondary/client employer is required to pay for sick leave, even if that employee has worked for the primary/staffing employer for longer than 90 days. This is an interesting change because the rules specifically says “pay for sick leave” rather than “use sick leave.” The rule change goes on to state that a secondary/client employer may not discriminate against an employee because of absences qualifying as sick time with the primary/staffing employer.

    Taken together, these two paragraphs presumably mean that an employee may use sick leave that they have accrued and are eligible to use with the primary/staffing employer, but the secondary/client employer has no obligation to pay for the sick leave if the employee has not worked for the secondary/client employer at least 90 days. This is an odd provision though because the primary/staffing employer would still be required to pay for the sick leave in these situations, and most primary/staffing employers are simply passing this cost along to the secondary/client employer.

  • The proposed rules allow a secondary/client employer who hires a temp placement employee to frontload time and prorate the amount frontloaded based on when the employee began working for the secondary/client employer (i.e. the placement date, not the hire date). The proposed rule goes on to say that time worked for both the primary/staffing employer and secondary/client employer count towards the 90-day eligibility requirement.

  • Finally, an employer who makes use of the undue hardship exception and requires sick leave to be used in four-hour increments may allow an employee to return to work sooner. In those cases, the employer must pay the employee for the sick leave used in four-hour blocks, as well as all time actually worked, meaning the employee may be paid for more hours than they were originally scheduled to work.

To sum it up, these rules provide some needed clarification, but many questions that have arisen since this law went into effect have still been left unanswered.  This is a prime opportunity to voice those concerns by making a public comment.

The deadline for public comment on the proposed rules is September 26, 2016 at 5:00 p.m. Comments may be emailed to [email protected] or the BOLI Rules Coordinator at [email protected] or mailed to Marcia Ohlemiller c/o BOLI, 800 NE Oregon St. #1045, Portland OR 97232.

If you have any questions about your organization’s sick leave obligations or how these proposed rule changes may affect your policies and practices, contact Cascade today.


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