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That's A Wrap - Key Employment Bills Passed During Oregon's 2015 Legislative Session

July 9, 2015

By Kara Backus, J. Chris Duckworth, Randi J. Ensley, Benjamin P. O'Glasser & Daniel L. Rowan

The 2015 Oregon Legislative Session is finally over.  Before adjourning on the evening of July 6, 2015, legislators passed a number of key employment bills that have now been signed into law by Governor Brown.  The new laws going into effect January 1, 2016 include: Oregon paid sick leave; protections for employees discussing wages in the workplace; additional social media protections; Oregon's "ban the box" law; gender neutral descriptions of marriage in existing laws; and continuation medical coverage under OFLA.  A number of other laws went into effect immediately, including: permission for public employers to offer differential pay to employees on active military duty; and expanded unemployment benefits for certain job seekers. 

In the paragraphs that follow, we summarize these and a number of other laws (15 in all) that are now in effect or will go into effect by January 1, 2016.

Oregon Paid Sick Leave
 
  • SB 454, signed by Governor Brown on June 22, 2015. 
  • Effective January 1, 2016.

Oregon has joined the “paid sick leave” movement, which now boasts at least 4 states, the District of Columbia, and 17 cities/counties.  Oregon’s new paid sick leave law, which goes into effect at the start of 2016, will require employers with 10 or more Oregon-based employees to give each worker up to 40 hours of paid sick leave per year.  Employers of fewer than 10 employees (or fewer than six for Portland employers) must provide unpaid sick leave.  Essentially all employers, including the public sector and state government, but not including the federal government, are covered.  There is no general carve-out for employees subject to a collective bargaining agreement (although certain collective bargaining agreements with hiring halls may waive the law).

Sick leave under the law may be used by an employee to care for his/her own health condition or that of a family member.  The law also permits use for any other reasons for which employees may take leave under the Oregon Family Medical Leave Act (including stalking and domestic violence leave, and bereavement).  Leave also may be used in case of a public health emergency.  

The state paid sick leave law does not disturb the City of Portland ordinance requiring employers of six employees within Oregon to provide paid sick leave intact; it does, however, cancel out Eugene's law and prohibits any other local government from imposing different sick leave requirements on private employers. 

With a few minor exceptions (such as railroad workers and children employed by their parents), the law benefits all employees, including exempt, non-exempt, part-time and temporary employees. Employees must either be allowed to accrue leave or must receive a front loaded amount.  Under the accrual method, an employee must be allowed to earn at least 1 hour of sick leave for every 30 hours.  Leave will begin to accrue on January 1, 2016 for current employees and employees hired after that date will begin accruing sick leave immediately upon hire (although accrued leave may not be used until the employee’s 91st calendar day of employment).  Employers may set a maximum of 80 hours accrual, and limit use to 40 hours each year.  Further, employers following the accrual method must allow employees to (1) carry over up to 40 hours of accrued, unused sick leave from year to year, or (2) pay the employee the equivalent of the unused sick leave at the end of the year and front load the employee 40 hours of leave to start the following year.  The law allows an employee to donate all/part of his/her accrual to a co-worker.

Under the front load method, the employer must credit an employee with at least 40 hours of sick leave as soon as he or she is eligible for leave.  While unused leave does not carry over from year to year, the employee must again be credited with at least 40 hours of sick leave at the beginning of the next year.  This pattern would then repeat from year to year.
Employers may but are not required to pay out unused, accrued sick leave at termination. If sick leave is not paid out at termination, an employee rehired within six months will retain that accrued sick leave balance that remained at termination.  Similarly, employees retain accrued sick leave when transferred between divisions in the company or if the company is sold.

Employers must provide written notice to employees, at least quarterly, of available Oregon sick leave balances. 

Employers with an existing PTO policy that is in compliance with the new law are not required to provide additional paid leave for a sick leave-related absences where an employee uses all available PTO. If an employer’s PTO policy is already Oregon sick time-compliant, employees may take leave for any reason and employers do not need to determine whether it is an Oregon sick leave-protected reason. Employees may take sick leave in increments of as little as one hour, unless doing so would constitute an “undue hardship.”

Oregon employers should review their existing policies carefully. Sick leave is legally protected time off.  Covered employers failing to comply with their sick leave obligations (whether by denying minimum benefits or use or by interfering with or retaliating against an employee who has taken sick leave, including by counting a protected absence against an employee under an attendance policy) will be subject to civil penalties once the law comes into effect.  An employee who believes his/her employer interfered with or failed to provide minimum benefits under the new law may bring an action for injunctive relief and back pay (and may also be awarded attorneys’ fees and costs).

In the coming months, BOLI will adopt rules for the implementation and administration of this new law.  Bullard Law will publish an additional and more detailed Alert after BOLI’s rules are finalized.  Further, Bullard Law also will present a workshop on the Oregon sick leave law (and the proposed FLSA regulations) on September 16, 2015; information on this presentation may be accessed on the Bullard Law website (see the Events page).

Wage Discussions Protected
 
  • HB 2007 A, signed by Governor Brown on June 10, 2015. 
  • Effective January 1, 2016.

 HB 2007 A represents an attempt to promote wage equity among Oregon workers.  The new law will make it an unlawful employment practice for an employer to take negative employment action against an employee who inquires about or discloses his or her wage information or the wage information of another employee.  This law also will prohibit an employer from retaliating against an employee who has filed a complaint or instituted an investigation based on a wage discussion.

The law carves out an important exception.  Specifically, it will not protect an employee whose job includes access to other employees’ wage information and who discloses another employee’s wage information to “individuals not authorized access to the information,” unless the disclosure is connected with an investigation or action. 

An employee who believes his/her rights under the new law have been violated will be able to file a complaint with BOLI.  Where a violation is found, BOLI may impose sanctions.  An employee also has the right to file a civil lawsuit against his/her employer.     
  
The National Labor Relations Act and the Public Employees Collective Bargaining Act already protect wage discussions for non-supervisory private and public employees, respectively.  HB 2007 A is broader and protects all employees, including supervisors. 

Ahead of the law going into effect, employers ought to review their work rules and confidentiality policies to ensure that wage discussions are not prohibited. 

Social Media Protection
 
  • SB 185 A, signed by Governor Brown on June 2, 2015. 
  • Effective January 1, 2016.

 In the social media field, Oregon law currently prohibits an employer from:
 
  1. Requiring employees or applicants to disclose the username and password to their personal social media accounts;
  2. Forcing employees or applicants to allow the employer to view their accounts;
  3. Forcing employees or applicants to “friend” the employer; or
  4. Taking negative employment action against employees or applicants who refuse to comply with any of the preceding requirements.

SB 185 A adds two additional categories to Oregon’s social media protection law.  Effective January 1, 2016, it will be an unlawful employment practice for an employer to:  
 
  1. Require an employee or applicant to establish or maintain a personal social media account; or
  2. Require that an employee or applicant allow the employer to advertise on his or her social media account.

This new law also broadly defines social media as “an electronic medium that allows users to create, share and view user-generated content, including, but not limited to, uploading or downloading videos, still photographs, blogs, video blogs, podcasts, instant messages, electronic mail or Internet website profiles or locations.” 

Importantly, the new law will limit these protections to social media accounts that employees or applicants use solely for personal purposes.  Thus, the law will not apply where:
 
  • Where an employee or applicant uses a particular account for any business purpose of the employer or in relation to a prospective application for employment; or
  • Where the employer or prospective employer provides the employee with the account or pays for the account.

Oregon Bans The Box
 
  • HB 3025 B, signed by Governor Brown on June 25, 2015. 
  • Effective January 1, 2016.

On January 1, 2016, it will be an unlawful employment practice for an employer “to exclude an applicant from an initial interview solely because of a past criminal conviction.”  Further, an employer will be barred from requiring an applicant to disclose criminal history information on an employment application or prior to an initial interview.  If the hiring process does not include an interview stage, the employer will be barred from requiring an applicant to disclose criminal history information prior to a conditional offer of employment. 

The law will have two significant exceptions.  It will not apply to (1) law enforcement agencies and employers in the criminal justice system or (2) nonemployee volunteers.
Although the state-wide “ban the box” legislation places yet another administrative burden on the hiring process, there is a ray of good news.  The law could have been worse, but is not as restrictive or cumbersome as many employers feared when the “ban the box” movement began gaining momentum in Portland (see the Bullard Edge discussion of Portland’s proposal).  The new law will still allow employers to refuse to hire an applicant based on criminal history.  Even though questions regarding criminal history will no longer be lawful to include on the employment application, an employer will be able to inquire about criminal history during an interview.  

In the months before January 1, 2016, employers should prepare to comply with this law.  In particular, employers will want to remove questions regarding criminal history from their employment applications.  Employers will also more generally want to review their selection procedures and their reasons for wanting criminal history information. 

Oregon Statutes Updated To Utilize Gender-Neutral Descriptions of Marriage
 
  • HB 2478 B, signed by Governor Brown on July 1, 2015. 
  • Effective January 1, 2016.

HB 2478 B will amend and modernize Oregon law by replacing references to marriages between a “husband and wife” with gender neutral references to “spouses married to each other.”  The intent of the law is to eliminate gender-based statutory language where gender distinction has no policy impact.  The law will amend statutes related to real property, tax and estates, civil rights, parental obligations, and dissolutions of marriage.

OFLA Amended To Require Continuation Coverage for Employees on Leave
 
  • HB 2600, signed by Governor Brown on June 10, 2015. 
  • Effective January 1, 2016.

HB 2600 brings the Oregon Family Leave Act into closer alignment with the Family Medical Leave Act.  Specifically, beginning January 1, 2016 an OFLA covered employer (one with 25 or more employees) that provides group health plan coverage to its employees will be required to continue offering an employee the same coverage, under the same terms (including with respect to any coverage provided to spouses and dependents of the employee), while the employee is on family leave under OFLA, in the same manner as if the employee had continued to work.  The employee will be required to continue making any required contributions toward premiums during the period of leave. 

The FMLA, which applies to employers of 50 or more, already requires this.  Because employers covered by both the FMLA and OFLA must provide employees with the most employee-friendly aspects of both laws, the real impact of this amendment will be to require employers of 25 to 49 employees to provide continuation coverage.  Thus, employers of that size that offer a group health plan to employees should review these new requirements for continuation coverage during an employee’s period of family leave. 

Domestic Violence Leave May Be Supplemented With Any Paid Leave
 
  • SB 492, signed by Governor Brown on June 10, 2015. 
  • Effective January 1, 2016.

Domestic violence is a despicable, but it happens.  As a consequence, there are times when employees need to take leave related to domestic violence.  When SB 492 goes into effect next year, it will require employers to permit employees to use accrued sick leave or personal business leave to handle matters related to domestic violence (including harassment, sexual assault, or stalking). 

Under existing law, employers with six or employees are required to allow an eligible employee to take leave to seek services, assistance, or treatment if the employee is a victim of domestic violence.  SB 492 will expand the types of paid leave that may be used during leave; in addition to accrued vacation leave or paid leave offered in lieu of vacation, an employee also will be able to use accrued sick leave and personal business leave.  The employee’s leave must still be reasonable and the employer can limit the amount of leave if the employee’s absence would create an undue hardship on the employer.

Public Sector Employers May Compensate Employees While on Military Duty
 
  • HB 2763, signed by Governor Brown on April 22, 2015. 
  • Effective immediately.

For many military personnel who are public employees, being deployed to active duty forces their families to take a financial hit because their military pay is lower than what they make in their civilian jobs.  Public employers have not been permitted to offer differential compensation to these employees to bridge the difference while they are actively deployed. 

This law removed that prohibition effective immediately.  Public employers now are permitted to offer differential pay to actively deployed military men and women, which pay bridges the difference between regular pay and military pay.  Offering differential pay is an option for public employers; it is not a requirement.

Unemployment Benefits Expanded When Seeking Employment in Home Market
 
  • HB 2440 A, signed by Governor Brown on May 20, 2015. 
  • Effective immediately.

The rule in Oregon has been that an individual receiving unemployment insurance benefits is considered unavailable for work, and therefore ineligible for continued benefits, if the individual leaves the local labor market.  There has been an exception where the individual travels to another market in order to look for work in that market.

House Bill 2440 A went into effect immediately upon being signed.  It amended the law to provide an additional exception for individuals who leave the local labor market in order to apply or interview for a position located in their home market.

Enforceability of Noncompetition Agreements Limited to 18 Months
 
  • HB 3236 A, signed by Governor Brown on June 16, 2015. 
  • Effective January 1, 2016.

ORS 653.295 currently limits the enforceability of noncompetition agreements to two years.  For noncompetition agreements entered into on or after January 1, 2016, the recently passed HB 3236 A will shorten the enforceability period to 18 months. 

HB 3236 A does not disturb the other restrictions on noncompetition agreements set out in ORS 653.295.  Generally, only workers who earn more than the median income for a family of four are subject to noncompetition agreements.  In the case of an applicant, an employer must inform the applicant at least two weeks before s/he starts work that a noncompetition agreement is a required condition of employment.  For current employees, a noncompetition agreement is only valid if it is entered into upon a “bona fide advancement.” 

Given Oregon’s strict restrictions on noncompetition agreements, employers may wish to consider whether a nonsolicitation agreement would meet its goals because nonsolicitation agreements are not subject to the restrictions in ORS 653.295.

Consumer Identity Theft Protection Act Expanded, Modernized
 
  • SB 601 A, signed by Governor Brown on June 10, 2015. 
  • Effective January 1, 2016.

SB 601 A expands the definition of “personal information” for purposes of the Oregon Consumer Identity Theft Protection Act of 2007 (the “Act”) and imposes additional requirements for businesses, organizations and individuals handling such consumer information in connection with their business, vocation, occupation or volunteer activities. 

Under current law, personal information includes a consumer’s first and last name (or first initial and last name) in combination with a Social Security number, driver’s license or state identification number, federally-issued identification number, or a financial account number or credit card number with its required security code, access code, or password. 
Effective at the start of next year, SB 601 A adds the following additional types of information that meet the definition of personal information when combined with a consumer’s first name or initial and last name:
 
  • Data obtained through measurement of a consumer’s physical characteristics, such as images of a fingerprint, retina or iris;
  • A consumer’s health insurance policy number or subscriber identification number in combination with another identifier used by the insurer; and
  • A consumer’s medical history information or information about the consumer’s mental or physical condition, diagnosis or treatment.

If any combination of the information described above has not been encrypted, redacted, or otherwise rendered unusable and would allow a person to commit identity theft against the consumer, the information will be considered personal information even if the consumer’s first and last name are not included.

SB 601 A also adds an additional notification requirement in the case of a breach of security involving personal information.  While existing law requires that holders of personal information notify affected individuals of a breach involving the individual’s personal information, beginning next year holders of personal information also must comply with a new requirement to report to the Attorney General regarding any breach involving more than 250 consumers.

Finally, SB 601 A makes violation of the Act an “unlawful practice” under the Unlawful Trade Practices Act, which allows more extensive enforcement of breaches. 

Contractors Using Public Funds Must Pay Prevailing Wage
 
  • SB 137 A, signed by Governor Brown on June 18, 2015. 
  • Effective immediately.

Contractors who perform projects using $750,000 or more of public funds are now subject to BOLI’s prevailing wage rate schedule, regardless whether their projects are on privately or publicly owned roads, highways, buildings, structures, or improvements.  The schedules are available at http://www.oregon.gov/boli/whd/pwr/pages/pwr_state.aspx.

Domestic Workers Granted Extensive Employment Rights
 
  • SB 552 A, signed by Governor Brown on June 16, 2015. 
  • Effective January 1, 2016.

While the number of laws protecting workers at times may seem dizzying, many of these laws do not apply for one reason or another to domestic workers.  SB 552 A, which goes into effect next year, addresses this.  It establishes workplace protections for domestic workers and classifies violations as unlawful employment practices.

The act defines a “domestic worker” generally as one who works in the home of another person for the purpose of caring for a child, doing housekeeping, or providing other domestic service.  The domestic worker definition applies even if there are no other “employees” in the “workplace.”  The act excludes eleven categories of persons, who it expressly states are not protected “domestic workers”.  A non-exhaustive list of these categories includes:
 
  • Various types of family members;
  • Elementary and high school students;
  • Babysitters under age 18 or who work on a casual basis;
  • Casual laborers;
  • Independent contractors;
  • House-sitters who do not perform domestic services; and
  • Certain persons otherwise excluded under federal law.

The rights granted to protected domestic workers include overtime pay, requirements for daily and weekly time off, allowance for food preparation, and paid personal leave based on the employee’s average weekly hours in the previous year.  Additionally, the act will bar employers from: requesting custody of the employee’s passport; making unwelcome sexual advances; intimidating or otherwise creating a hostile work environment; harassing based on a protected class; or retaliating against the employee.

BOLI will be promulgating regulations consistent with the new law.  The agency also will have the authority to accept complaints alleging violations of this law.  (Note: Separate from this new law, on June 10, 2015 the Oregon Court of Appeals recently held that a domestic service worker could assert a wrongful discharge claim after the worker was terminated for reporting the homeowner’s criminal conduct.  See McManus v. Auchincloss.) 

Non-Profits Are Considered Public Employers Under Public Employee Transfer Law
 
  • HB 2214 A, signed by Governor Brown on June 10, 2015. 
  • Effective January 1, 2016.

Under ORS 236.605 through ORS 236.640, public employees whose duties have been assumed or acquired by another public employer have certain rights and protections.  Beginning next year, HB 2214 A extends those rights to public employees whose job duties are transferred to Oregon nonprofit corporations.  This amendment to the statute reverses legislation from 2013 which excluded Oregon nonprofits from the definition of public employers.  Public employers and Oregon nonprofits receiving public funds are advised to consult with counsel to ensure compliance with Oregon’s public employee transfer statute. 

New Oregon Retirement Savings Board to Create New State-Wide Retirement Plan
 
  • HB 2960 B, signed by Governor Brown on June 25, 2015. 
  • Effective immediately.

HB 2960 B creates a new seven-member Oregon Retirement Savings Board within the State Treasurer’s office.  The Board’s job will be to create a state-wide defined contribution retirement plan for employees in Oregon.  Employers that do not currently sponsor a qualified retirement plan would be required to automatically enroll employees in the new plan, and to deduct contributions from employees’ paychecks.  Employees who are automatically enrolled in the plan, which is expected to be similar to an Individual Retirement Account, or “IRA,” would have an opportunity to opt out of the plan if they do not wish to participate.  Employers would not be required to make contributions to the plan, and employers who already sponsor a qualified retirement plan would be exempt from offering the plan to employees. 

A unique feature of the state-wide retirement plan will be its portability.  Specifically, an employee will be allowed to maintain a plan account regardless of his/her place of employment.  If the employee changes jobs, his/her new employer could continue to withhold and deposit the employee’s deferrals into the employee’s existing account in the plan.

Before establishing the plan, the Board will spend 18 months conducting market and legal analyses of the feasibility of the plan.  It must report the results to a Legislative committee on or before December 31, 2016.  If feasible, the plan would be established in time for participants to begin making contributions by July 1, 2017.  Under the new law, the plan cannot be established if the Board determines that the plan would qualify as an “employee benefits plan” under ERISA, the federal law governing such plans. 

Notable Bills Not Passed 

At the conclusion of every legislative session there are a number of noteworthy bills failed to win support at some point along the road from introduction to enrollment.  The 2015 legislative session was no different.  Here is a non-exhaustive list of some of notable bills that did not become laws this session (and a link for more information about any of them):
 
  • Bills relating to the minimum wage rate
    (SB 327, SB 597, SB 610, SB 682, HB 2008, HB 2009)
  • Bills relating to state preemption of local authority to set minimum wage standards
    (SB 332, HB 2004)
  • Bills relating to paid sick leave
    (SB 653, HB 2005A, HB 3204, HB 3205)
  • Bills relating to paid family leave
    (SB 654, HB 3202, HB 3203)
  • Bills relating to matters subject to collective bargaining during term of a CBA
    (HB 2544)

There are many other bills that fell short of passage.  For a more complete list, please feel free to contact Bullard Law attorney Randi Ensley.
 
 
Bullard Law will continue to monitor developments under these new laws and to track other proposals not yet signed into law.  Please feel free to contact us anytime with any questions about these matters or any other labor, employment, or benefits issues.
 
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