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NewsBrief – September 2025

In This Issue:

Compliance Corner: Independent Contractor Guide

Each month, we highlight one of the many resources exclusively available to you as a member of Cascade.

This month, we are featuring our Independent Contractor Guide. This guide helps Oregon employers stay compliant by outlining the numerous state and federal tests for determining a worker's classification. This guide also details the significant risks and legal consequences of misclassification, providing essential information to help you stay compliant and avoid costly penalties, back taxes, and lawsuits.

Paid Leave Oregon Changes and Best Practices

Cascade Compliance Team
compliance@cascadeemployers.com

The Oregon Employment Department (OED) continues to address issues with Paid Leave Oregon (PLO) that affect both employers and employees. This year’s legislative session enacted the following adjustments to PLO under Senate Bill 69 (SB 69):

  • Effective September 26, 2025, employers may require return-to-work certification when an employee is returning from Paid Leave Oregon medical leave.
  • Effective January 1, 2026, the Oregon Bureau of Labor and Industries (BOLI) will be responsible for enforcing the job protection, anti-discrimination, and retaliation provisions of PLO.

PLO Return-to-Work-Certification

Currently, employers cannot request return-to-work certifications when an employee is returning from leave under PLO. For example, if an employee’s leave is approved by OED from July 15, 2025, to September 8, 2025, the employer must allow the employee to return to work on September 9th without requiring documentation. Beginning September 26th, employers may request such certification. This change aligns with the Family Medical Leave Act (FMLA), which already permits employers to request return-to-work certification when an employee returns from leave due to their own serious health condition. It’s recommended that employers begin requesting return-to-work certification from employees returning to work from medical leave as soon as the change goes into effect.

BOLI Enforcement

The OED is currently responsible for enforcing all aspects of PLO. Beginning January 1, 2026, enforcement of job protection, anti-discrimination, and retaliation provisions will transfer to BOLI. In recent trainings, BOLI has shared several best practices and key considerations for employers navigating paid leave situations:

  • When employees notify their employers of a potential need for leave covered under PLO, BOLI recommends that employers inform them that job-protected PLO may be available and that it is the employee’s responsibility to apply. Employers should document this notification.
  • As a reminder, PLO job protection begins once an employee has been employed for 90 or more consecutive calendar days. If an employee takes leave that starts before they reach 90 days of employment but continues past that 90 day mark, it would be risky for an employer to take adverse action related to attendance. Such action could be viewed as retaliatory if it relates to the employee’s attendance during that leave period.
  • If an employee requires leave related to a serious health condition or pregnancy prior to gaining protection under PLO, they may be entitled to ADA or pregnancy-related accommodations. According to BOLI, if an employee needs leave as an accommodation only a few weeks before becoming eligible for PLO job protection, it is unlikely that providing such leave would be considered an undue hardship for the employer.
  • PLO and OFLA both provide leave for pregnancy disability and to care for a child with a serious health condition. As a reminder, PLO and OFLA no longer run concurrently. Employers with OFLA-eligible employees should discuss with employees the order in which leave may be taken, as the sequence can affect the total amount of leave available. For example, if an employee uses PLO for pregnancy-related leave, they will have less PLO available for bonding. However, if the employee first uses OFLA for pregnancy disability leave, they may then apply for PLO bonding leave once OFLA ends, potentially extending total leave beyond 12 weeks.
  • There is often a delay between an employee beginning leave and being approved under PLO. For example, an employee could begin their leave but not be approved for PLO for 30 days after beginning leave. BOLI recommends that employers treat this time as protected under PLO until a determination is made. Accordingly, during this delay, employers generally should not require employees to use PTO/vacation/sick, even if that is normally required when leave is not PLO-covered. If the PLO leave is denied, employers can retroactively apply their policy requirements regarding employer-provided paid time off.

For more information regarding Paid Leave Oregon, please visit Cascade’s PLO site and HR Library. You may also contact us at compliance@cascadeemployers.com with any questions.

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Federal Guidance on Unlawful Discrimination Published

Cascade Compliance Team
compliance@cascadeemployers.com

On July 29, 2025, the U.S. Attorney General published a memo providing new guidance to all federal agencies and recipients of federal funding regarding unlawful discrimination. The memo states that all entities receiving federal funds (state/local governments, hospitals, contractors, etc.) must ensure strict compliance with federal anti-discrimination laws. This is nothing new. However, this memo finally provides some guidance on what the current administration believes would be unlawful. While not creating new law, this memo is the DOJ's boldest and most detailed statement yet on how federal anti-discrimination law applies to DEI—and to any program that may resemble DEI. Institutions must now not just look at what their programs say, but also carefully evaluate how they operate.

Unlawful Discriminatory Practices—What’s Prohibited?

The guidance lists five key categories of practices that, according to DOJ’s interpretation, are unlawful for recipients of federal funding:

  • Preferential treatment based on protected characteristics: Any program, benefit, or opportunity reserved for one group based on race, sex, or similar characteristics—such as race-based scholarships, hiring, promotion, or exclusive facilities—violates federal law unless it meets very narrow legal exceptions.
  • Use of “proxies” for discrimination: Even facially neutral criteria (such as “cultural competence,” “lived experience,” or targeting specific geographical areas) are considered unlawful if selected or applied to advantage or disadvantage individuals based on protected characteristics.
  • Segregation: Separating or restricting access to programs or spaces—like training sessions or lounges—by race or sex is generally unlawful except in specific contexts like biological sex-segregated athletic teams or facilities.
  • Use of protected characteristics in candidate selection: Requiring that a certain percentage of candidates, contract awards, or program participants come from particular demographic groups, or using “diverse slates” or diversity-focused selection panels, constitutes unlawful discrimination if not legally justified.
  • Training programs that promote discrimination or a hostile environment: Trainings that stereotype, exclude, or demean based on protected characteristics in a severe and pervasive manner, or that require people to affirm certain ideological positions about race or gender, are deemed illegal under this guidance. Consistent with current anti-discrimination laws, the Guidance states, “Federal law allows workplace trainings that are focused on preventing unlawful workplace discrimination and that do not single out particular groups as inherently racist or sexist.”

What Are Good Practices?

The memo also offers what it deems as “best practices” (non-binding, not mandatory) for recipients to avoid running afoul of the law, including:

  • Ensuring open access to all programs, resources, and trainings regardless of protected characteristics.
  • Using measurable and job-related qualifications only—never demographic-based or proxy-based criteria. “If using criteria in hiring, promotions, or selecting contracts that might correlate with protected characteristics, document clear, legitimate rationales unrelated to race, sex, or other protected characteristics.”
  • Eliminating quotas (already illegal), benchmarks, and any demographic-driven policies in candidate selection, contracting, or scholarships.
  • Including clear nondiscrimination and anti-retaliation clauses in partner contracts, with active monitoring for compliance.
  • Establishing confidential and accessible mechanisms for reporting discrimination or retaliation.

As a reminder, this memo is non-binding and is not law. Rather the memo provides clarification on the current administration’s view of federal anti-discrimination laws. Much of the memo confirms what we already know to be illegal discrimination under current federal law. It also highlights new areas of focus, such as proxy practices, that will require organizations receiving federal funds to evaluate their programs and practices with even more scrutiny.

Cascade will continue to monitor this and its impacts on the workplace. Never hesitate to reach out if you have any questions.

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Federal Contractors Required to Wind Down Affirmative Action Plans

Cascade Compliance Team
compliance@cascadeemployers.com

On June 27, 2025, the Office of Federal Contract Compliance Programs (OFCCP) issued a letter requesting federal contractors to submit information about their efforts to wind down compliance with Executive Order (EO) 11246, which was rescinded on January 21, 2025. The deadline to submit this information is September 25, 2025, and submission is voluntary. EO 11246 required federal contractors to create and implement affirmative action plans for women and minorities. The purpose of affirmative action plans was to ensure that applicants and employees were treated equally in regards to race, color, religion, sex, sexual orientation, gender identify, or national origin.

Federal contractors and subcontractors should make efforts to wind down compliance with EO 11246 by:

  • Reviewing employment practices—including hiring, promotions, terminations—for goals based on race or gender, targeted outreach efforts, or any other practices aimed towards any specific demographic group.
  • Reviewing all requirements of new contracts before certifying compliance.
  • Considering whether to reach out to legal counsel to determine if it is in the organization's best interest to submit information about wind-down efforts to the OFCCP.

The Department of Labor (DOL) has also proposed changes to requirements for Section 503 of the Rehabilitation Act of 1973 (Section 503), which prohibits disability discrimination. Additionally, the OFCCP has proposed changes to the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA), which addresses nondiscrimination against veterans in employment.

The DOL has proposed the following changes to Section 503:

  • Remove all cross-references to EO 11246.
  • Rescind regulations requiring contractors to invite applicants and employees to self-identify their disability status.
  • Rescind utilization goal requirements, including the requirement to conduct a utilization analysis.

The OFCCP has proposed the following changes to VEVRAA:

  • Remove all cross-references to EO 11246.
  • Remove all administrative enforcement proceedings related to EO 11246.

It’s important to note that these changes are proposed, and it is unknown whether they will take effect. Section 503 and VEVRAA applies only to employers with federal contracts or subcontracts of $10,000 or more. Federal contractors meeting this threshold must continue to comply with current nondiscrimination requirements under both laws. Contractors with 50 or more employees and contracts over $50,000 (for Section 503) and $150,000 (for VEVRAA) must continue to develop and maintain written affirmative action plans in compliance with current requirements.

Affirmative Action Plan Wind-Down Checklist

  • Discontinue maintaining AAPs based on race and sex.
  • Stop the use of placement goals based on race and sex.
  • Evaluate hiring, promotion, compensation, and termination processes to determine if any metrics related to EO 11246 (i.e., women and minorities) are tied to those processes. If there are metrics related to EO 11246, eliminate them.
  • Evaluate DEI initiatives to ensure that the programs do not have any preferences based on race and/or sex.
  • Continue to maintain AAP obligations under Section 503 of the Rehabilitation Act of 1973 (Section 503), which prohibits disability discrimination, and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), which prohibits discrimination against veterans.
    • Section 503 Obligations
      • Offer the opportunity to self-identify as an individual with a disability at the following:
        • Each applicant at the pre-offer phase of the hiring process
        • Each applicant at the post-offer phase of the hiring process
        • Every five years
        • Remind employees during the intervening five years that they may voluntarily update their disability status at any time.
      • Perform annual utilization analysis, comparing the representation of individuals with disabilities in the organization's workforce to the total number of employees in the workforce. (Provided in written AAP report.)
      • Measure the progress and effectiveness of outreach and recruitment efforts.
    • VEVRAA Obligations
      • Offer the opportunity to self-identify as a veteran to the following (no specific form required to be used):
        • Each applicant at the pre-offer phase of the hiring process
        • Each applicant at the post-offer phase of the hiring process
      • VETS-4212 Federal Contractor Veterans’ Employment Report
        • Complete and submit the VETS-4212 report annually each year by September 30. More information on VETS-4212 reporting may be found here.
      • Post employment openings with an appropriate employment service delivery system (executive and top management positions, positions that will be filled internally, and positions lasting 3 days or less do not have to be posted here). Find the correct employment service delivery system here (varies by state).
      • Compare the percentage of hires and employees promoted to the VEVRAA hiring and promotion benchmark. (Provided in written AAP report.)
      • Measure the progress and effectiveness of outreach and recruitment efforts.
  • Document all steps taken to cease activities related to EO 11246.
  • Consider whether to voluntarily submit documentation showing EO 11246 efforts to the OFCCP. It’s recommended to consult legal counsel before submitting any information.

Never hesitate to reach out if you have any questions.

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Understanding the Federal Civil Rights Fraud Initiative

Cascade Compliance Team
compliance@cascadeemployers.com

Earlier this summer, the Department of Justice (DOJ) announced a new Civil Rights Fraud Initiative aimed towards enforcing federal civil rights and ensuring equal protection under the law. Specifically, the initiative is to prevent organizations from accepting federal funds while engaging in discriminatory practices.  The Initiative will primarily be enforced through the False Claims Act (FCA).

The FCA was enacted in 1863 to combat fraud against the federal government. In simple terms, this law targets entities that make false statements or claims to the government in order to get paid.  Under the FCA, the DOJ will argue that if a recipient of federal funds falsely claims it complies with civil rights laws but is actually doing things like running discriminatory DEI programs, it is effectively committing fraud against the federal government. What does the DOJ consider unlawful discrimination?  The DOJ explains it here.

Based on the new Civil Rights Fraud Initiative, civil rights violations may be treated as a form of fraud and may result in severe penalties. FCA violations have the potential for treble damages, meaning that organizations in violation of the FCA may be required to pay back three times the amount of funds received from the federal government.

Additionally, the DOJ is encouraging individuals to report any knowledge of civil rights law violations. Individuals are also encouraged to file “qui tam” lawsuits, which allow private citizens to file a lawsuit on behalf of the federal government. Individuals filing such lawsuits may receive a portion of any funds recovered through the lawsuit.

Recipients of Federal Funds

Recipients of federal funds include federal contractors, organizations with federal grants, or other entities, such as universities, accepting federal funds. Recipients of federal funds also include organizations receiving pass-through grants, where states receive federal funds and then award those funds to organizations as grants or payments.

When receiving federal funds, organizations must certify that they are in compliance with all federal anti-discrimination laws and do not operate any programs promoting DEI that violate federal anti-discrimination laws. Organizations that complete this certification without being in compliance may violate the FCA and be subject to the penalties mentioned above.

Employers should prepare for FCA enforcement by reviewing EEO policies and practices; documenting practices in relation to employment decisions such as hiring, promotions, and terminations; and evaluating DEI programs to ensure compliance with civil rights and non-discrimination laws.

Cascade will continue to monitor this and its impacts on the workplace. Never hesitate to reach out if you have any questions.

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Hot Compliance Question

Cascade Compliance Team
compliance@cascadeemployers.com

Question: How do I know if my worker is an Independent Contractor or an employee for wage and hour purposes?

Answer: To determine whether the worker is an Independent Contractor or an employee for wage and hour purposes, you must apply a set of criteria to see if they meet what is called the “economic realities test.” This test is followed by both Oregon law, under the Bureau of Labor and Industries (BOLI), and Federal law, under the Department of Labor (DOL).

The "economic realities test" is comprised of six components to determine whether the worker is “economically dependent” upon the potential employer. Employees are “economically dependent” upon their employers, and independent contractors are not. All components must be considered, and one factor alone does not make the determination:

  • Opportunity for profit or loss depending on managerial skill;
  • Investments by the worker and the potential employer;
  • Degree of permanence of the work relationship;
  • Nature and degree of control;
  • Extent to which the work performed is an integral part of the potential employer’s business; and,
  • Skill and initiative.

Important Note: The test for an independent contractor in Oregon can vary depending on the particular employment context. While BOLI and the DOL use the "economic realities test" for wage and hour issues, other Oregon agencies use different criteria for other purposes, such as unemployment insurance, workers' compensation, or income taxes.  Cascade members, check out this month’s Compliance Corner (above), featuring the Independent Contractor Guide, for a clear breakdown of these different tests and more!

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Member Benefit Spotlight: The HR Practices Assessment (HRA)

By Sheryl Kelsh, Membership Development Manager
skelsh@cascadeemployers.com

Did you know that your Cascade membership includes access to a Human Resources Practices Assessment (HRA)? While this benefit is often introduced to new members, it’s available to all members who have not yet taken advantage of it.

The HRA is a simple but powerful process designed to give you practical feedback and recommendations tailored to your organization. Here’s how it works:

  1. Online Survey – You’ll receive a link to a quick survey that gathers information about your current HR structure.
  2. Personalized Consultation – Once you’ve completed the survey, one of our Cascade HR Consultants will schedule a one-on-one Zoom session with you. Together, you’ll review your responses, discuss areas of strength and opportunity, and explore strategies and resources that can help.

Why take advantage of the HRA? Regulations and HR best practices are always changing. The HRA helps you:

  • Stay current on compliance matters
  • Plan projects and prioritize initiatives
  • Learn where to find support and resources when you need them most

Whether you’re a brand-new member or have been part of the Cascade community for years, the HRA is a great way to make sure your HR practices are strong, compliant, and working for you.

Ready to get started?
Contact Sheryl Kelsh to request your survey link and begin your assessment today.

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