Oregon Amends Sick Leave Law to Provide More Clarity for Employers

On January 1, 2016 all Oregon employers with 10 or more employees (6 or more employees if an employer is located in a city with a population exceeding 500,000 – which is Portland) must provide up to 40 hours of paid sick leave per year.  Employers with less than 10 employees (less than 6 for employers located in a city with a population exceeding 500,000) must provide up to 40 hours of unpaid protected sick leave.

Many questions arose as to how to administer certain aspects of the new law, so the legislature recently passed amendments to provide clarity for Oregon employers.

Here is a brief summary of the changes:


Sick Leave Accrual and Cap

Employers can limit an employee’s sick leave accrual to 40 hours per year, and can limit an employee’s sick leave bank to 80 hours total – 40 hours of sick leave accrued during the current year plus 40 hours of sick leave carryover.  Employers can also prohibit employees from using more than 40 hours of sick leave in a year, even if they have more leave available as a result of the carryover.


Setting Limits on Sick Leave Accrual and Use
while employers are required to allow employees to earn and use up to 40 hours of sick leave per year and carry over up to 40 hours of sick time into the following year, they may adopt a policy that caps an employee’s total sick leave accrual to no more than 80 total hours, and limit an employee from using more than 40 hours of sick time per year, regardless of how many hours of sick leave have been accrued.

This does not apply to employers that frontload at least 40 hours of leave at the beginning of each year.


More Generous PTO/Sick Leave Policies

An employer with a policy that provides more PTO or sick leave than the 40 hours per year the law requires is only required to comply with the law’s requirements to provide protected sick leave for the first 40 hours taken per year, regardless of how much actual time off employees may accrue per year under the more generous policy.


Paid Sick Leave Pay for Piece Rate/Commissioned Employees

Previously, paid sick leave for piece rate and commissioned employees was paid at the employee’s regular rate of pay, or if the employee did not have a previously established regular rate of pay, the Oregon minimum wage.

Now, if an employee is paid a regular wage (hourly, weekly or monthly) and is also paid on a piece-rate or a commission basis, sick leave is paid at a rate comparable to the employee’s hourly, weekly or monthly wage, or the Oregon minimum wage, whichever is greater.


Seasonal Farm Stands or Temporary Construction Offices in the Portland Area are not considered to be “located” in Portland When Counting Employees

The amendment clarifies that seasonal farm stands or temporary construction offices (trailers) located in Portland are not subject to the lower (six) employee count when determining whether to provide paid or unpaid sick leave.


Who’s Included When Counting Employees?

The amended law specifies certain individuals who are not included in the employee count when determining whether an employer must provide paid or unpaid leave as:  directors of a corporation, members of an LLC, partners of an LLP, and sole proprietors, when those people have a substantial ownership interest in the operation (more than 15% and not less than the average of other owners).  Members of the immediate families (child, spouses, and parents) of these people can also be excluded.  This can be significant if you employee family members.


When do These Changes Become Effective?

The amended law is applicable to hours worked and sick time accrued or used on or after January 1, 2018.


Click here to read the text of the amended law.


2017 Holloway HR Consulting