United States: Oregon Adopts New Broad Paid Family Medical Leave Law

Last Updated: September 2 2019
Article by Erin O. Sweeney

On August 9, Oregon's governor signed into law House Bill 2005, which establishes one of the most comprehensive paid family and medical leave programs in the country. Starting in January 2023, Oregon employees can apply for and receive up to 12 weeks of paid leave benefits for leave that qualifies as parental, medical, or safe leave (for victims of domestic violence). The law establishes a new benefit insurance fund, administered by the state's Employment Department, to which employers with 25 or more employees must make joint contributions.

Key Provisions of the New Law

  • Employers with 25 or more employees in Oregon, and their employees, must generally contribute to the fund: Employers will make 40% of the required contributions to the plan; employees will pay 60%.
  • Employers that provide employees with equivalent paid leave under their own plan can apply for an exemption that relieves them and their employees from the obligation to make these contributions.
  • Required contributions to the plan must begin by January 1, 2022. All notices to employees required by the new law, its enforcement provisions, prohibitions on discrimination or retaliation, and recordkeeping requirements will also go into effect in January 2022. Eligible employees can receive paid leave benefits starting on January 1, 2023.
  • Employees who believe they are discriminated or retaliated against for invoking their rights under the new law will be able to bring a civil action or file an administrative complaint for any alleged interference.
  • Employers that fail to file required reports or pay contributions will face a penalty of up to 1% of all employee wages. Corporate officers, LLC members, and partners can also be held personally liable for amounts due and could face criminal misdemeanor charges for violations. The Director of the Employment Department can also bring civil actions, assess further penalties, settle disputes over delinquent amounts, and bring criminal misdemeanor charges against individual corporate officers.

Paid Family and Medical Leave Fund: The Basics

Employees and employers will make contributions throughout the year to the state's Paid Family and Medical Leave Insurance Fund, which will be administered by the Oregon Employment Department. Employees who worked at least 90 days for an employer can apply with the state for 12 weeks of paid insurance benefits per year for qualifying family, medical, or safe leave, and up to 14 weeks for certain pregnancy-related leave. Paid leave provided under the new fund will be supplemental to any other unpaid leave an employee may qualify for under Oregon's Family Medical Leave Act (OFLA) or the federal Family Medical Leave Act (FMLA), paid sick leave under Oregon law, or other paid benefits provided by an employer. However, employees cannot use a combination of paid sick leave, any vacation or other employer-provided paid leave, and insurance fund benefits to obtain more than 100% of the wages missed during a period of family medical leave. All leave benefits granted from the fund must be taken concurrently with any family and medical leave under OFLA or FMLA for the same qualifying purpose. Employees will not receive benefits from the fund for any weeks they also receive workers' compensation or unemployment benefits.

Required Contributions to the Fund

All employers with 25 or more employees in the State of Oregon and their eligible employees must contribute to the new family and medical leave fund. Contribution percentages will be determined by the Director of the Employment Department, but should not exceed 1% of employee wages and will be capped at $132,900 per year for an employee. Employers must pay 40% of the total required for each eligible employee. Employees will be responsible for the remaining 60% through payroll deductions.

The employer contribution portion may not be deducted from employee wages, but employers can elect to pay portions of the employee's contribution as an employer-provided benefit. Employee payroll contributions will be held in trust by an employer and paid to the Oregon Department of Revenue on a quarterly basis.

Employers with fewer than 25 employees in Oregon need not make the 40% contribution, but may make payroll contributions to the fund. Small employers that voluntarily elect to pay the employer contribution to the fund can also apply for a state-funded grant for reimbursement for some of their contribution.

Employee Notice of Leave Required for Benefits

Employees will have to give written notice to their employer of the need and reasons for leave at least 30 days prior to its commencement. If the leave is not foreseeable, an employee can give an employer verbal notice within 24 hours, but must still provide written notice within three days. An employer must notify the Employment Department when any employee fails to provide the required notice as the Department may reduce any benefits provided to the employee under the fund.

Unlawful Employment Practices and Employer Safe Harbor

The new law prohibits discrimination and retaliation against employees who invoke or inquire about their rights under the new law, and any interference with their rights. Employees who receive benefits from the fund and take leave must be restored to their prior position without regard to whether the position was filled with a replacement. If the prior position no longer exists, then employees must be offered another available equivalent position. However, the law does not require employers to retain a temporary worker it may have hired to replace an employee on leave. The law also provides a safe harbor against civil actions brought by a worker hired or transferred to temporarily replace an employee on leave. To use this safe harbor, the employer must inform the temporary employee at the time of hire or reassignment that they are temporarily replacing an employee on leave.

Enforcement

Employees will be able to bring a civil action or file a complaint with Oregon's Bureau of Labor and Industries to enforce their rights under the law. Employers that willfully make false statements or fail to report material facts about employee claims or eligibility will face a civil penalty of up to $1,000 for each occurrence. Improper employer reports will also be subject to penalties based on a percentage of employees' total amount of wages. The law also imposes criminal liability on businesses and their officers for failure to comply with the law. Officers of any defaulting employer can be held personally liable for any amounts due.

Employers to Adopt Written Notices of Employee Rights

Employers must adopt and provide written notices to employees about their rights and duties under the law. At a minimum, the notice must advise employees about:

  • Their right to (a) claim and receive family and medical leave insurance benefits, including their right to appeal benefit determinations; (b) job protection; and (c) file a complaint or bring a civil action for violating the law;
  • The procedure for filing a claim for benefits;
  • Requirements for providing notice before starting leave and any penalties or repercussions for failure to comply;
  • A description of the law's prohibition against discrimination and retaliation for an employee inquiring about the insurance program, giving notice of leave, taking leave or claiming benefits; and
  • A statement that the health information an employee may provide to an employer related to leave is confidential and only released with the employee's permission or as required by law or court order.

Exemption for an Employer's Equivalent Plan

Employers that provide equivalent paid family medical leave benefits can apply to the Department for an exemption from making contributions and deducting employee contributions if:

  • Their plan is available to all employees who are continuously employed for 30 days;
  • The benefits provided to employees are equal to or greater than the weekly benefits and duration of leave an eligible employee would qualify for under the law; and
  • The employer provides written notice to employees about the benefits available under their plan, including duration of leave; the process for filing a claim and deductions; the employee's right to dispute a benefit determination, job protection, and benefit continuation; and a statement about the prohibition of discrimination or retaliation.

Most Provisions Take Effect in 2022 and 2023

The Employment Department will establish more detailed rules for applying and interpreting the law, including the approval process for any employer-provided equivalent plan, by September 1, 2021. Employees will not be eligible for benefits under the new fund until January 1, 2023. However, employers and employees must commence contributions starting January 1, 2022. The other substantive portions of the law will also go into effect on January 1, 2022.

More Guidance to Come

The Employment Department and legislature has several years to establish more substantive procedures and rules ironing out some gaps and questions that remain about the new groundbreaking law. In the meantime, employers are encouraged to consult with counsel for advice and guidance on preparing for the law's implementation.1

Footnotes

1 Littler's Portland office will host a Breakfast Briefing to cover the new requirements of the law. Employers interested in receiving more information on this law and/or the Breakfast Briefing can contact the author.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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