The Portland City Council has passed a paid sick leave mandate that requires employers to provide paid leave for employees to use for personal and family member illness as well as certain safety concerns. The new ordinance takes effect on Jan. 1, 2014. Employers who already offer paid sick leave or paid time off still need to review, and likely revise, their policies.

Detailed provisions related to accrual rates, carry-over, and other aspects of use and administration are included in the ordinance. There are required postings and record keeping. Employers not in compliance may be subject to enforcement by BOLI or through private lawsuits brought by employees.

Portland joins Seattle, San Francisco, Washington, D.C., and the entire state of Connecticut, all of which have similar requirements either in effect or set to take effect soon. Many other cities are considering similar legislation.

Importantly, this ordinance applies to any employer who has employees who perform work in the City of Portland, regardless of where the employer is headquartered or where the the employee primarily performs services.

Key aspects of the Portland ordinance include:

Covered employers: Employers with a minimum of six employees must provide paid leave as described below. Small employers—those with a maximum of five employees—must also provide sick time, but it may be unpaid.

Accrual rate: Employees must receive a minimum of one hour of paid (or unpaid for small employers) sick time for every 30 hours of work performed. Full-time exempt employees are presumed to work 40 hours per week.

Counting hours: The accrual is based on hours worked within the City of Portland. This includes employees not regularly employed in Portland but who occasionally perform services in Portland. All hours worked in Portland must be counted.

Carry-over and caps: Employees may accrue a maximum of 40 hours of sick time per calendar year and may carry over a maximum of 40 hours to the next year. If the employee is rehired within six months, the employee must have his or her previous accrued sick time restored.

Cash-outs: Accrued but unused sick time is not required to be paid out upon separation of employment.

Permitted uses of paid sick leave: The ordinance mandates leave for situations that go beyond ordinary sick leave. Employees may use this accrued leave:

• For the diagnosis, care, or treatment of the employee or the employee’s family member’s mental or physical illness, injury, or health condition.
• To deal with the consequences of domestic abuse, sexual assault, or stalking (in coordination with Oregon’s Domestic Violence Leave provisions).
• If a place of business, or a child’s school or place of care, is closed for a public health emergency.

Use of sick time: Employees may use sick time in increments of one hour, unless the employer allows less time and only for an otherwise qualifying absence from work performed in Portland.

Waiting period for new employees: Leave begins accruing immediately upon hire, but may not be used in the first 90 days of employment, unless the employer’s policies otherwise allow for earlier use.

Existing PTO and other paid leave: Employers who already provide paid sick time or other paid time off (“PTO”) do not have to provide additional leave as long as their sick time or PTO policies or practices meet the minimum accrual rates prescribed by this ordinance, and employees have access to the paid leave for the same reasons and in the same manner.

Non-retaliation and enforcement: Employees may not be retaliated against for exercising their rights under the ordinance. The ordinance will be enforced by the Oregon Bureau of Labor & Industries (BOLI).

Requiring verification: Employers may require documentation of illness if three consecutive days of leave is used. The employer must pay any cost not covered by insurance of obtaining such documentation. It is not clear how these verification provisions of the ordinance will be reconciled with different rules under the FMLA related to shorter absences and healthcare provider certifications of serious health conditions.

Regulation deadline: The administrative rules governing implementation of the sick leave code must be adopted before Aug. 31, 2013.

Posting requirement: Employers must provide and post notice of employee rights under the ordinance. The notice must be in in English and other languages used to communicate with the employer’s workforce. The city will be preparing a template. Use of a poster is also an acceptable form of notice.

Recordkeeping: Employer must keep records documenting hours work and sick time accrued and used by employees for at least two years.

Davis Wright Tremaine will be monitoring this ordinance, including the publication of proposed regulations. Employers who have questions or concerns, or who wish assistance in providing input on the regulations, are invited to contact us.