On June 29, 2017, Governor Brown signed SB 299 – Oregon Sick Leave Amendments – into law. The new law makes changes, both large and small, to Oregon’s existing sick leave law and will take effect on January 1, 2018.
The changes can be summarized as follows:
- Most importantly, the amendments clarify a critical point of confusion when PTO is used to satisfy an employer’s sick leave obligations. Many, including us at Cascade, initially read the law to mean an employer needs to protect only the first 40 hours of PTO used in a year, regardless of whether the PTO was used for sick leave reasons or other personal reasons like vacations. BOLI, however, has taken the position that the employer must track the reasons PTO is used and protect the first 40 hours used for sick leave reasons. The amendments clarify that an employer needs to protect only the first 40 hours of PTO used – regardless of the reason it was used.
It also clarifies that a PTO program needs to comply with all of the sick leave requirements only for the first 40 hours provided per year, after which an employer can create whatever rules it likes governing the remaining time provided. Despite these clarifications, it is important that employers continue to track the reasons for PTO use until this change goes into effect on January 1, 2018.
- The current law requires employers with six or more employees within the city limits of Portland to provide paid sick leave. Outside of Portland employers with 10 or more employees are required to provide paid sick leave. Employers with fewer employees must still provide sick leave time, but it does not need to be paid. The amendments exempt employers with only seasonal farm stands or trailers used temporarily on a construction site for office purposes that are located within the city limits of Portland from the requirement of providing paid leave if they have 6 or more employees. Employers who meet the exemption must provide paid sick leave only if they have 10 or more employees. Employers who meet the exemption and have fewer than 10 employees must still provide unpaid sick leave.
- There are some minor amendments making it clear that employers may cap employees’ accrual and use of sick leave at 40 hours per year and that employers may impose an absolute cap of 80 hours on total accrued sick leave. While most had already interpreted the sick leave law to allow for these caps, the amendments revise the language to remove ambiguities in how the law was previously worded.
- The amendments exclude certain owners and family members from the definition of employee, meaning an employer does not need to provide them with sick leave if it does not wish to. Those excluded include an individual or a parent, spouse or child of an individual who is:
- A director of a corporation who has a substantial ownership interest in the corporation;
- A member of a limited liability company who has:
- A right to vote on or consent to any matter submitted to a vote or requiring the consent of the members of the limited liability company; and
- A substantial ownership interest in the limited liability company;
- A partner of a limited liability partnership who has a substantial ownership interest in the limited liability partnership; or
- A sole proprietor of a business
The amendments define “substantial ownership interest” as a percentage of ownership equal to or greater than the average percentages of ownership of all owners, but no less than 15%.
- The current law states that employees who are paid on a commission or piece-rate basis shall be paid at their regular rate of pay, and if a regular rate is not established, at a rate at least equal to minimum wage. The amendments remove the regular rate language in this section, so that commission and piece-rate employees need to be paid only minimum wage for sick leave used, unless a greater rate is offered by the employer. The amendments also clarify that if an employee earns an hourly, weekly, or monthly wage and is paid on a commission or piece-rate basis in addition to the wage, the employer must pay the employee for sick leave used at either the hourly, weekly or monthly wage or at the minimum wage, whichever is greater.
For questions about how these amendments may affect your organization, or for a review of your sick, vacation, or PTO policies, give us a call today.