Summary of Sick Leave Law

The State of Oregon passed a law on June 22, 2015 requiring employers to provide protected sick time to all employees.  This new law goes into effect as of January 1, 2016 and affects all businesses.  We recommend that businesses review their current sick / vacation / PTO policies to ensure these policies are in line with the new law and to clearly define the terms of the sick / vacation / PTO policy.

Below are key highlights of the new law:

Who does the new law effect?
Employers that have employees working anywhere in Oregon must implement a sick leave policy that will allow an employee to earn and use up to 40 hours of sick time per year. Sick time is protected and employers must not retaliate or discriminate against an employee who inquires about, requests, or uses protected time.

Who is an employee?
For the law, the definition of employee is any individual who renders personal services at a fixed rate to an employer if the employer pays or agrees to pay for personal services or permits the individual to perform personal services. Therefore, employees can be full time or part time and receive sick leave.

Employees include, but are not limited to:

  • Individuals who are paid hourly, salary, or commission based;
  • Individuals for whom withholding is required;
  • Home care workers;
  • An individual who is paid on a piece-rate basis or basis of the number of operations accomplished or quantity produced or handled.

Employees do not include:

  • An employee who receives paid sick time under federal law;
  • Independent contractor;
  • A participant in a work training program administered under a state or federal assistance program;
  • Participant in a work-study program that provides students in secondary or post-secondary educational institutions with employment opportunities for financial or vocational training;
  • Railroad workers;
  • Individual employed by that individual’s parent, spouse, or child.

How do employers calculate the number of employees?
The number of total employees (both part and full time) an employer has will determine whether the employer must provide paid or non-paid sick leave.  The number of employees will be calculated by a per day/weekly average.  If the employer was in business the entire preceding year, the number of employees will be calculated by the day/weekly average for each of the last twenty workweeks in the preceding calendar or fiscal year of the employer.  If the employer was not in business for the entire preceding year the calculation is more complicated and we recommend contacting a tax professional to help you with the calculation.  If unsure of your calculation, give us a call.  The calculation is not always simple.

How much sick time can employees accrue?
Sick time must accrue at a rate of at least one hour for every 30 hours worked, unless the employer elects to frontload sick time. Employees begin to earn and accrue sick time as of the first day of employment.

Do employers have to pay for the accrued sick leave when it is used?
Employers with 10 or more employees must provide paid sick time. However, the threshold number of employees for paid sick time drops to six for employers that maintain any office, store, restaurant or establishment within the City of Portland. Paid sick time must be paid at the employee’s regular rate of pay and without a reduction in benefits.

Is there any unpaid sick leave?
Employers with fewer than 10 employees (or fewer than six for Portland employers) must offer unpaid sick time, but may elect to offer it as paid. No special rules for Eugene.

How much accrued sick time can employee’s carryover?
An employee may carry over up to 40 hours of unused sick time from one year to a subsequent year but an employer may limit an employee to accruing no more than 80 hours of sick time and to using no more than 40 hours of sick time in a year.

How and when may employees use the accrued sick time?
Employees may use sick time beginning with his or her 91st day of employment and it may be used for the employee physical or mental illness, injury, or health condition (including routine doctor or dentist appointments), as well as for the care of a family member for absences due to domestic violence, or in the event of a public health emergency. The employee cannot be required to find a replacement worker or work an alternate shift as a condition of, or to make up for, the use of sick time.

How many hours of accrued sick leave must an employer allow its employees to use at one time?
Employers must allow employees to use sick leave in hourly increments.  If allowing employees to use sick leave in hourly increments would impose an undue hardship on the employer and the employer has a policy that allows an employee to accrue, at least, 56 hours of sick leave per year, then the employer may require that employees use sick leave time in increments of no greater than four hours.

What if an employer has a vacation / PTO policy in place already?
Employers are free to provide for more generous sick leave policies and may comply with the law through vacation or paid time off policies so long as the minimum requirements of the law are met.

Do employees have to give notice of taking sick leave?
Employers may still require their employees to comply with their usual notice and procedural requirements for absences and requesting time off so long as those requirements do not interfere with the employees’ ability to make use of their accrued sick time. However, an employer may not require more than 10 days advance notice when a leave is foreseeable.

Is there a limited exception for unions?
The law provides a limited exception for employees whose terms and conditions of employment are covered by a collective bargaining agreement, who are employed through a hiring hall or similar referral system, and whose employment benefits are provided by a joint multi-employee trust or benefit plan. Other unionized workers who do not fall within this exception must be provided sick time in accordance with the law.

Do I have to notify my employees of how much accrued sick leave they have accrued?
Yes.  Employers must provide employees with at least a quarterly notice of the amount of their accrued and unused sick time and must provide all employees with information about the law’s benefits and requirements.

This is only a summary.  Regulations and interpretations are available, and should be studied to understand the full act.  Remember that you will need to post an updated new employee poster regarding sick leave soon.

For a complete copy of the Act, see https://olis.leg.state.or.us/liz/2015R1/Measures/Overview/SB454