Portland’s Sick Leave Ordinance—What Every Employer Should Know

Effective January 1, 2014, Portland’s sick leave ordinance goes into effect. The ordinance applies to any private sector employer (both within and outside of the state of Oregon) that employs individuals who work within the city of Portland.

The requirements of the ordinance vary depending upon the number of employees an employer has who meet certain requirements. Employees are defined as individuals who have worked at least 240 hours in a “year” within the geographical boundaries of the city of Portland. Worked time includes telecommuting time during which the employee telecommutes in the city of Portland. Worked time also includes travel time during which an employee enters into the city of Portland, for example for meetings, deliveries, etc. A year is defined as any consecutive 12-month period that is normally used by the employer for purposes of calculating benefits.

Employers with six or more employees meeting those threshold requirements must provide a minimum of one hour of paid sick time for every 30 hours of work performed by that employee within the city of Portland. Smaller employers, those with five or less employees, must provide covered employees with a minimum of one hour of unpaid sick time for every 30 hours of work performed by the employee within the city of Portland.

Under the ordinance, employees may accrue a maximum of 40 hours of sick time in a calendar year, unless the employer provides or is contractually obligated to provide more. An employer may provide sick time equivalent to the maximum 40 hours per year at the beginning of the calendar year to meet the requirement for accrual (also called “frontloading”). Additionally, employees must be allowed to carry over unused sick time from one year to the next. However, an employer is not required to allow an employee to carry over more than 40 accrued hours, and employers are not required to allow employees to use more than 40 hours of sick time under the ordinance in any year. Employers may, but are not required to, cash out unused sick leave upon an employee’s termination. Whether unused sick time will be cashed out should be made clear in the employer’s policy.

Qualifying employees must be permitted to use paid sick time in one-hour increments for several purposes, including (1) to care for their own sickness or the sickness of a family member; (2) for leave relating to Oregon’s protections afforded to victims of domestic violence, harassment, sexual assault, or stalking; (3) for leave necessitated by the closure of the employee’s workplace or the employee’s child’s school because of a public health emergency; (4) for leave to care for a family member whose presence in the community jeopardizes the health of others; and (5) a leave of absence necessitated when the employer is required by law to exclude the employee from the workplace for health reasons.

The ordinance applies to both hourly, non-exempt employees and salaried, exempt employees. Hourly employees who are entitled to paid leave under the ordinance must be paid at their regular rate of pay. Exempt employees are paid at an hourly rate determined by dividing the employee’s annual salary by 52, and then dividing the weekly salary by the number of hours in the employee’s normal workweek (presumed to be 40 hours).

Employers must provide notice to employees of their rights under the ordinance. This includes posting a notice in each building and worksite in an area accessible to, and regularly frequented by, employees. Employers must also provide—no less than quarterly—written notification to employees of the amount of accrued but unused sick time available to each employee. The initial notification for current employees must start no later than the end of the employer’s first pay period in 2014, and at the end of the first pay period for new employees.

An employer that already has a paid time off (PTO) policy that provides a minimum of 40 hours of PTO per calendar year, or an employer with five or less employees that provides a minimum of 40 hours of unpaid time off per calendar year, is not required to provide additional paid sick leave under the ordinance. However, employers with PTO policies must still ensure that those policies comply with certain notice, posting, and recordkeeping requirements of the ordinance. Further, an employee who uses PTO for one of the qualifying purposes under the ordinance has additional rights and is protected against retaliation.

An employer that fails to provide sick time consistent with the ordinance may be fined equal to three times the dollar amount of sick time the employee was refused or $250 (whichever is greater).

Note: This article was published in the December 4, 2013 issue of the Oregon eAuthority.