Oregon Employment Law Update: Summary & To Do List

Schwabe, Williamson & Wyatt PC

Schwabe, Williamson & Wyatt PC

Oregon passed several employment bills this year that will affect Oregon employers. The following article provides an update on the new laws and a list of tasks for Oregon employers to make sure that they are in compliance.

Pregnancy Accommodation

Oregon’s new pregnancy accommodation statute follows similar legislation in Washington and California that requires employers to provide accommodations to pregnant women. However, the accommodation requirements will be familiar to Oregon employers, as the Americans with Disabilities Act (“ADA”) and Oregon’s similar statute (ORS 659A.103, et seq.) already require that employers accommodate qualified employees with disabilities. The pregnancy accommodation statute extends these accommodation and interactive process requirements to pregnant women who are not covered under the federal or state versions of the ADA because pregnancy is not considered a “disability” under those laws.

Effective January 1, 2020, Oregon employers with six or more employees must provide reasonable accommodations to employees and applicants who have limitations related to pregnancy, unless doing so would impose an undue hardship. The Employer Accommodation for Pregnancy Act, House Bill (“HB”) 2341, requires employers to provide reasonable accommodations for any known limitations related to pregnancy, childbirth, lactation, or related medical conditions. Reasonable accommodations may include, but are not limited to:

  • Acquisition or modification of equipment or devices;
  • More frequent or longer break periods or periodic rest;
  • Assistance with manual labor; or
  • Modification of work schedules or job assignments.

Employers do not have to provide reasonable accommodations if doing so would impose an undue hardship. To qualify as an undue hardship, the accommodation must require significant difficulty or expense, taking into account the same factors that apply under Oregon disability discrimination law. These include factors such as cost, the company’s financial resources, number of employees, the impact on the facility’s operations, the number of locations, and the nature of the employer’s operations. This new law also prohibits employers from taking a paternalistic attitude to the abilities of pregnant women by imposing unnecessary accommodations or requiring employees to take leave (including leave under the Oregon Family Leave Act) when an alternative reasonable accommodation is available.       

In addition to providing reasonable accommodations, employers must provide written notification of the Employer Accommodation for Pregnancy Act to new hires at the time of hire, within 180 days of the Act’s effective date (i.e., by June 29, 2020) to all existing employees, and within 10 days to an employee who has informed her employer of a pregnancy. Furthermore, employers must post signs in a conspicuous and accessible location on their premises informing their employees of the protections under the Act.

 To Do: By June 29, 2020, employers should do the following:

  • Update handbooks and reasonable accommodation policies.
  • Update onboarding documents to provide the required notices.
  • Train managers on the updated policies.
  • Educate yourself and your managers on interactive process conversations to provide reasonable accommodations. See the on our website regarding the interactive process.
  • Post written notices.

Oregon Retirement Savings Plan

In 2017, the Oregon Retirement Savings Board adopted final rules to implement the Oregon Retirement Savings Program (known as “OregonSaves”) codified at OAR 170-090-0001 et seq. OregonSaves establishes a state-sponsored payroll deduction retirement savings plan requiring Oregon employers that do not offer retirement plans to their employees to make payroll deductions from their workers’ wages into the state’s program.

Effective January 1, 2020, Oregon employers that do not comply with the rules of OregonSaves will face penalties. Any employer found not to comply with the rules of the program, including registering the company and enrolling employees, will face civil penalties of up to $100 for each employee eligible to participate in OregonSaves, up to $5,000 per year.

Under Senate Bill (“SB”) 164, two years after the deadline by which the employer is required to register with OregonSaves (a rolling deadline based on the employer’s size), an employee can file a complaint with the Oregon Bureau of Labor and Industries (“BOLI”) if the employer is not in compliance. BOLI can also investigate compliance upon the request of the Oregon Retirement Savings Board. 

Oregon Workplace Fairness Act

Oregon’s new Workplace Fairness Act, SB 726, signed into law on June 11, 2019, significantly changes employers’ obligations with respect to handling discrimination and sexual assault in the workplace. Most notably, SB 726 increases the statute of limitations for certain claims from one year to five years, makes it unlawful for an employer to require nondisclosure and nondisparagement provisions in ‎specific agreements with employees, and imposes new discrimination policy and complaint process requirements on all public and private employers.

SB 726 expands the statute of limitations from one year to five years for conduct that constitutes sexual assault as well as discrimination based on race, color, religion, sex, sexual orientation, national origin, marital status, age, expunged juvenile records, uniformed service, or disability. This expanded statute of limitations will provide challenges for employers to defend a claim that is not brought until five years after the alleged conduct occurred. Best practices for employers will be to document all conversations with employees over issues and investigate any complaints of harassment or discrimination to protect the memory of all involved. In addition, employers will want to provide respectful workplace and anti-harassment training to all employees and managers so that they understand the employer’s expectation that employees report harassment or discrimination in a reasonable time to preserve memories and evidence.

Effective October 1, 2020, employers are prohibited from entering into agreements with employees or prospective employees that contain a nondisclosure, nondisparagement, or other provision that prevents the employee from disclosing or discussing conduct that constitutes covered discrimination. An employer may enter into an agreement that includes a nondisclosure, nondisparagement, or no-rehire provision only when an employee claiming to be aggrieved by discrimination requests to enter into the agreement. Any agreement must provide the employee at least seven days to revoke the agreement after execution.  

Effective October 1, 2020, all Oregon employers are required to adopt a written policy containing procedures and practices to reduce and prevent discrimination and sexual assault. At a minimum, the policy must: (1) provide a process for employees to report prohibited conduct, (2) identify the person, and an alternate, to whom employees should report prohibited conduct, (3) include the applicable statute of limitations for the employee to bring a legal claim, (4) include a statement that an employer may not require or coerce an employee to enter into a nondisclosure or nondisparagement agreement that prevents the employee from discussing discrimination or sexual assault that occurred at work or between employees, (5) notify the employee that they may request that a nondisclosure or nondisparagement clause be included, and that if they choose to include a nondisclosure or nondisparagement clause, the employee has seven days after the agreement is signed to change their mind before the agreement becomes final, and (6) include a statement advising employers and employees to document any incidents involving covered discrimination or sexual assault.

Keep an eye out for BOLI’s model policies that employers may use as guidance to establish their own policies.

To Do:

  • Update your anti-harassment and discrimination policies to comply with the requirements set out in SB 726.
  • Provide updated respectful workplace and anti-harassment training to all employees and managers.
  • Provide updated manager training regarding the importance of documentation.
  • Have a plan in place for investigating harassment claims, whether this is by your own human resources department or an outside consultant or attorney. You can access this article on our website for additional information on workplace investigations.
  • Review your insurance coverages with your broker to ensure that you have adequate amounts of Employment Practices Liability Insurance (“EPLI”) Coverage to protect your business and managers from a harassment claim.

Pay Equity “Fix”

The Oregon state legislature recently passed SB 123, which provides a number of “fixes” to Oregon’s Equal Pay Act. Pursuant to Oregon’s Equal Pay Act, employers must compensate employees at the same rate for work of comparable character unless the difference is based on one or more bona fide factors. The Act provides a voluntary equal pay analysis safe harbor, which protects employers against potential compensatory and punitive damages if they can show that they conducted a good faith equal pay analysis and have made progress toward eliminating wage differentials. The 2019 fix includes an updated definition of “system,” compensation for modified work, and the requirements for an employer’s pay equity analysis.

First, SB 123 updates the definition of “system” to mean “a consistent and verifiable method in use at the time that a violation is alleged.” This definition applies to the bona fide factors, which include a seniority system, merit system, and system that measures earnings by quantity or quality. Second, SB 123 clarifies that an employer may pay a different level of compensation to an employee who is performing modified work due to a covered workers’ compensation injury or temporarily performing modified work authorized by a medical professional due to a medical condition. Finally, SB 123 addresses the pay equity analysis requirements, clarifying that the analysis must include a review of practices designed to eliminate unlawful wage differentials between all employees, but does not have to specifically relate to the protected class asserted by the plaintiff. The employer must also make reasonable and substantial progress towards eliminating wage differentials for its employees, not just wage differentials within the protected class asserted by the plaintiff. Pursuant to this fix, employers will qualify for the safe harbor pay equity analysis even if they do not identify the protected class status of their employees.

To Do:

  • Ensure that any systems in place (seniority system, merit system, productivity system) that may be used to determine compensation are well defined and consistently applied.
  • If the company has not already done so, consider performing a pay equity analysis.

Noncompetition Agreements

Oregon employers must meet certain requirements in order have a nonvoidable noncompetition agreement. Oregon recently added a new restriction to the list, now requiring that within 30 days after the date of termination of an employee’s employment, the employer must provide a signed written copy of the terms of the noncompetition agreement to the employee. For more details, see the article regarding Oregon and Washington noncompetition agreements on our website.‎

To Do:

  • Review Oregon’s requirements regarding noncompetition agreements.
  • Update your exit interview or termination procedures to ensure that any employee with a noncompetition clause or agreement is provided with a copy of that agreement.

Sexual Orientation

On May 6, 2019, Governor Kate Brown signed HB 2589, which clarifies that sexual orientation is not considered a physical or mental impairment, and that an individual does not have a disability solely because of the individual’s sexual orientation.

Protecting Victims of Intimidation (“Hate Crimes”)

Effective May 28, 2019, an individual cannot be disqualified for unemployment insurance benefits for voluntarily leaving work, failing to apply for available suitable work, or failing to accept suitable work if they or a member of their immediate family was a victim of conduct that constitutes a crime of intimidation. HB 3120 expands Oregon’s current protections for victims of domestic violence, stalking, or sexual assault to include victims of intimidation.

To Do:

  • Train individuals responsible for responding on an employer’s behalf to the Employment Division on the new law.

Oregon Paid Family and Medical Leave

The Oregon state legislature followed the lead of California and Washington and passed HB 2005, which requires all Oregon employers to provide up to 12 to 18 weeks of paid family and medical leave (“PFML”) to eligible employees beginning January 1, 2023. Qualifying reasons for taking PFML include leave from work due to the individual’s own serious health condition, to care for a family member with a serious health condition, to care for and bond with a child during the first year after the child’s birth, foster placement, or adoption, or safe leave to seek law enforcement assistance, medical treatment, counseling, or relocation related to domestic violence, sexual assault, harassment, stalking, or intimidation. The new law creates the Family and Medical Leave Insurance (“FAMLI”) Program, modeled after Oregon’s unemployment insurance program. Paid leave will be funded with payroll contributions, and the FAMLI Program will be administered by the Oregon Employment Department.

HB 2005 requires employers to provide their workers with 12 weeks of paid leave, and an additional two weeks of paid leave for women who experience complications due to pregnancy or childbirth. Employees who take PFML and are eligible for unpaid leave under the Oregon Family Leave Act (“OFLA”) may take an additional four weeks of unpaid leave (which is capped at 16 weeks, or 18 weeks for those experiencing complications due to pregnancy, childbirth, or a related medical condition). PFML generally runs concurrently with OFLA and the federal Family and Medical Leave Act (“FMLA”) for the same purposes, but does not run concurrently with OFLA sick child leave, bereavement leave, or the 14-day military spouse leave in preparation for a spouse’s deployment or return. PFML is in addition to sick time as required by Oregon law, and employers cannot combine sick time and PFML in a day for the same purpose. Effectively, this means that employees will be able to take up to 13 weeks of paid time off (12 weeks of PFML, plus an additional 40 hours of paid sick leave). Employers cannot require employees to use PFML before other employer-provided benefits.

Employees are eligible for benefits if they have received at least $1,000 in wages during the previous year, and if they have contributed to the FAMLI fund. Eligible employees may begin receiving benefit payments January 1, 2023. Employers must provide benefits as follows:

  • An employee’s weekly benefit amount is capped at 120% of state average weekly wage, with a floor of 5% of state average weekly wage.
  • Employees who earn less than 65% of the state average weekly wage will receive 100% of their average weekly wage.
  • Employees who earn more than 65% of the state average weekly wage will receive 65% of the state average weekly wage plus 50% of the amount by which the employee’s average weekly wage exceeds the state average weekly wage.

Employers may permit employees to use paid sick time, vacation leave, or any other paid leave the employee has earned in addition to receiving PFML benefits to replace an employee’s wages up to 100% of the eligible employee’s average weekly wage during a period of leave taken for family leave, medical leave, or safe leave.

Funding for the FAMLI Program will be provided through a payroll tax, the rate of which will be set by the Director of the Employment Department. HB 2005 provides that employers with 25 or more employees will contribute 40% of the total rate set by the Director, and deduct the remaining 60% from each employee’s wages. Employers may pay a larger amount of the employee’s portion as an employer-offered benefit. Employers with fewer than 25 employees are exempt from paying the employer portion of the contribution, but those employers who elect to pay into the program will be eligible for grants to help cover the cost of replacement workers when employees are out on leave. Either way, eligible employees will still be assessed the employee contribution and be eligible for PFML benefits.

Additional key provisions of the new law include:

  • Employers must provide notice to employees about their rights and responsibilities under PFML. The Employment Department will draft a model notice.
  • Employers that establish benefit plans equivalent to the FAMLI Program and approved by the Employment Department will be deemed compliant with the new law. But be aware that if an employer’s benefit plan fails to accurately pay an employee’s benefits, the employer could be subject to wage and hour claims related to any payment errors.
  • Certain officers, members, or partners of a company may be held personally liable for violations, which carry both civil and criminal penalties.
  • HB 2005 provides job protections for employees who utilize the program.
  • Beginning January 1, 2025, employees may sue employers for violations of the law. Potential damages include back pay, compensatory damages, and punitive damages.

Implementation dates for PFML are as follows:

  • On or before September 1, 2021: The Employment Department will issue rules governing administration of the FAMLI Program.
  • January 1, 2022: Employee payroll contributions begin.
  • January 1, 2022: Employers must provide written notice to employees of their rights under the FAMLI Program.
  • January 1, 2023: Employees may begin taking PFML.

To Do:

  • Employers can anticipate that employees will take advantage of the PFML and should evaluate whether employees are cross-trained to assist in performing the job duties for absent employees.
  • Keep an eye out for additional guidance from the Employment Department with respect to a model notices and handbook policies.
  • Review your insurance coverages to ensure that you are adequately protected. Inquire with your broker whether EPLI coverage will insure claims under this law, as many EPLI policies do not cover wage claims.
  • Review your directors’ and officers’ liability coverage, as this statute makes officers and directors personally civilly and criminally liable for violations of the law.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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