Understanding Portland’s New Sick Time Law
(Last Amended 1/13/14)
1.) Q: What is the Portland Protected Sick Time Ordinance?
A: On March 13, 2013, the Portland City Council unanimously passed a law that allows everyone working within Portland city limits to accrue paid and protected sick time at work. The law ensures that everyone working in Portland can have time off work when they or a family member are sick, to recover from illness, seek preventive care, or deal with issues that arise in domestic violence situations. The City Council concluded after extensive evidence and testimony that when people can stay home from work to care for self or family when sick, the community and the workplace benefit. Employers in turn have healthier and more productive workforce due to reduced contagion and turnover, and public health improves. (Amended on 12/24/13)
2.) Q: When did the Portland Sick Time Ordinance go into effect?
A: On January 1, 2014 eligible workers began accruing sick time.
3.) Q: What businesses are affected by the Portland Sick Time law?
A: All businesses operating within the City Limits must provide sick leave under this new law. Under the new law, employers with 6 or more employees provide up to 40 hours of paid, protected sick time per year. Employers with 5 or fewer employees must provide up to 40 hours of protected sick time per year, but have a choice about whether to provide paid or unpaid time. Employers can always allow more than the law requires as many businesses already do. This law simply sets a minimum baseline for providing the benefit.
4.) Q: How does a business know if it is conducting business within the City Limits?
A: A downloadable map of the City of Portland is not possible at the scale necessary to see the boundaries, however based upon a specific address, a map accessible through the City website will confirm whether or not a location is within the city boundary. Destinations and or permanent work locations can be confirmed through the website. by entering the address for your place of business. However, even if your business is located outside the city limits, but you have employees who work within city limits, they are still eligible for protected sick time.
5.) Q: How do I calculate the number of employees in my business if it fluctuates during the course of the year? (New on 12/24/13)
A: All Employees who work for the Employer shall be counted for the purpose of determining the number of Employees an Employer has. This includes full-time Employees, temporary Employees, part-time Employees, and Employees who work outside the City or outside the State of Oregon. For established Employers, the number of Employees is calculated based on the number of Employees who were employed each working day during each of twenty (20) or more calendar work weeks in the calendar year in which the leave is to be taken or in the calendar year immediately preceding the year in which the leave is to be taken. For Employers that did not have any Employees for at least twenty (20) work weeks in the previous or current calendar year, the number of Employees shall be calculated based upon the average number of Employees per calendar work week during the first ninety (90) calendar days of the current calendar year.
6.) Q: What is meant by a Year, how do we measure, is it a calendar year or a fiscal year?
A: “Year” means any consecutive 12-month period of time that is normally used by an employer for calculating wages and benefits, including a calendar year, tax year, fiscal year, contract year, or the year running from an employee’s anniversary date of employment. Whichever way you choose to measure a year, consistency in calculating this from year to year and from employee to employee is important for proof of records.
7.) Q: What is a PTO? (New on 12/24/13)
A: PTO stands for Paid time off. It is a form of providing sick leave in combination with other leaves including vacation leave. All leaves become one and the same, that is, simply Paid Time Off, and it is the employee’s responsibility to monitor how and for what leave it is used for. A PTO policy that allows for 40 hours of paid time off, can meet the requirements of this ordinance and can be for some business models the preferred method of providing sick time benefit.
8.) Q: Which employers are affected by the Portland Protected Sick Time Ordinance? (New 12/24/13)
A: The law covers all employers who have employees that perform work inside the city limits ofPortland. Even if the employer is not based within the city limits, if their employees spend time working in the city, the employer is covered by this law.
9.) Q: Who counts as an employee?
A: An employee is anyone the employer pays or agrees to pay for services in a home or place of business. Those people whom you do not need to count as employees include: a co-partner of the employer, independent contractors, those in work-study programs, or those in state or federal-run work training programs.
For employers with a fluctuating number of employees, any person who has been employed each working day during each of 20 or more work weeks in the current or preceding calendar year should be counted as en employee.
10.) Q: How are temporary employees affected?
A: The law applies to employees who work 240 hours or more in a year inPortland – regardless of their temporary or permanent status. An employer can elect to cover employees who work fewer hours inPortland since this law is just a minimum floor.
ACCRUAL OF SICK TIME
11.) Q: At what rate do employees accrue sick leave? (New on 12/24/13)
A: Both paid and unpaid leave are required to accrue at a rate of 1 hour of sick leave for every 30 hours worked.
12.) Q: When does sick time accrual start? (New on 12/24/13)
A: Sick leave accrual for all employees begins onJan. 1, 2014 or, after that date, when an employee begins work in the City. Employees are required to immediately begin accruing sick leave, but cannot take accrued leave until after 90 days of employment with that business. In addition, an employee who has not worked 240 hours inside the city limits in a year is not eligible to use accrued sick leave.
13.) Q: What happens once an employee has worked for an employer for 90 days? (New on 12/24/13)
A: If you have worked a minimum of 240 hours for that employer, you are then eligible to take sick leave once it is earned. See questions/answers below that describe what you can take sick leave for (qualifying absences) and how you go about notifying your employer when such a need arises. Employers can also do better than the law requires by instituting a policy that allows employees to use sick leave sooner then the 90-day waiting period.
14.) Q. If an employee worked 240 hours in the City during 2013, does that satisfy the 240 hour eligibility requirement? (Revised Jan. 13, 2014)
A: No. An Employee becomes eligible to use Sick Time when he or she has worked for an employer within the geographic boundaries of the City for at least 240 hours in a Year, starting in Year 2014. (Revised Jan. 13, 2014)
15.) Q: Do employees need to work 240 hours every year to be eligible for Sick Time? (Revised Jan. 13, 2014)
A: No. Once an Employee becomes eligible to use Sick Time (Has worked 240 hours in a Year) he or she remains eligible regardless of the number of hours worked for that employer in subsequent Years. Employees do not need to reestablish eligibility in subsequent Years unless they change employers or are separated from their employer for more than six (6) months. (Also see related 90 day eligibility requirement for new employees). (Revised Jan. 13, 2014).
16.) Q. If an employee has not met the 240 hours requirement, can they apply hours worked in one year towards meeting the criteria in the next year? (Revised Jan. 13, 2014)
A: No. While all Employees begin accruing sick time on the first day of employment in 2014, they must have worked at least 240 hours in a Year (starting Year is 2014) within the City to be eligible to use Sick Time. The Ordinance does not allow employees to combine hours from multiple years to satisfy this requirement, though an Employer may do otherwise. (Revised Jan. 13, 2014)
17.) Q: How does the 240 hour eligibility requirement work if our business operates our payroll and benefits on a fiscal year or anniversary date of the employee instead of a Calendar Year? (New - Jan. 13, 2014)
A: If an Employer works off of a Year other than Calendar Year (Based on Contract, Anniversary date of the Employee or Fiscal Year), then the Employer will need to calculate based upon the remainder of the Year to be completed in 2014 or any type of Year that begins in 2014. For example: if the Anniversary Date of the Employee is June 30th. The employee will either need to accrue 240 hours between January 1st 2014 and June 30th, 2014 to be eligible to take sick leave earned, or if the accrual is not met, must start again on July 1st 2014, which is the beginning of the Employee’s new Year. In any case, the Employer can otherwise do better than the law by frontloading the sick leave or allowing the Employee to take earned sick time prior to them meeting the 240 hour requirement. (New - Jan. 13, 2014)
18.) Q: What happens if an employee earns more than 40 hours in a year?
A: For a full time employee, they will earn more than 40 hours of sick time in a year based on the ordinance accrual rate of 1 hour earned for every 30 hours worked. In fact in a year that is based on 2,080 hours worked that = 69.33 hours. While the employer can provide for more, they are not required to provide more than 40 hours of sick time in a year to employees.
19.) Q: What if an employee does not use the sick time earned in the year, can they carry it over into the next or do they need to start over? (Revised 12/24/13)
A: They do not need to start over. The ordinance requires that the employee be allowed to carryover unused time into the next year. For example if an employee earns 40 hours of sick leave in year 2014 but does not use it, they can carry it over into the next year. They can also earn 40 hours of sick time in Year 2015 and carry that over into the next year, which means they have essentially earned 80 hours of sick time and have not used any of it. However they can only use 40 hours of sick time in a given year unless otherwise allowed by the employer. (Revised 12/24/13)
20.) Q: What if the company has 6 or more employees but only one of them works in the City on a regular basis, does the company have to implement paid sick time?
A: Yes - it doesn’t matter where your business is located or where all the employees primarily work - if you have more than 6 employees then any employees working at least 240 hours a year within the City should accrue paid sick time.
21.) Q: Does “staffing agency” include Professional Employment Organizations (PEO) and must they comply with the law if the receiving business leases the employee. Isn’t the receiving business the business now liable for the benefits?
A: Any organization that provides staffing services must also provide temporary leased staff with access to protected sick time. Provision for payment of sick time can be arranged through the receiving company but all records of hours of employment and use of sick time must be tracked by the staffing agency as the primary employer. Therefore, the staffing agency is the liable entity to ensure adequate access to time and pay for their leased employees. For example, the 240 hours is earned through the staffing agency and the 90 day requirement is also through the staffing agency. (Revised 12/24/13)
22.) Q: Does Paid Time Off (PTO) count as protected sick time?
A: Yes, if an employer already has a PTO policy in place that meets the minimum requirements of this policy (e.g. allows employee to take leave for qualifying absences, provides employee ability to earn 1 hour for every 30 hours worked, allows up to a minimum of 40 hours in a year and allows use even when the need for sick time is unforeseeable), then the employer is already in compliance.
23.) Q: If an employer offers 40 hours of PTO per year, which accrues at a rate equal to or greater than the requirement of the Ordinance, and if an employee exhausts all 40 hours for non-Sick Time purposes, does that employee still accrue and retain protected sick time for purposes of carryover into the following year?
A: No – if an employer offers 40 hours of PTO in accordance with the requirements of the ordinance and for the purposes covered by protected sick time, and an employee exhausts their PTO for other purposes allowed by the employer then they employer cannot be compelled to offer additional time. However, they can give the employee access to additional time, either paid or unpaid, if they choose to do so. (Revised 12/24/13)
24.) Q: Is “frontloading” of protected sick time or PTO allowed?
A: Yes – if an employer decides to “frontload” – or give 40 hours or protected sick time or PTO all at once at the start of the year – in lieu of having them accrue on hour for every 30 hours worked throughout the year – they are allowed to do so. The employees must have access to the frontloaded time for sick leave purposes if needed.
25.) Q: Does unused sick leave “roll over” from year to year or pay out upon termination?
A: Up to 40 hours of unused, accrued protected sick time can roll over to a new year, but an employer is not required to allow employees to take more than 40 hours of sick time in any one year. An employer is not required to pay employees for any unused sick time upon termination, resignation, retirement, or other separation from employment.
26.) Q: Is an employer required to pay out unused sick time at the end of each year? (New on 12/24/13)
A: No, an employer does not have to pay out unused sick leave nor is an employer who uses the standard accrual method of 1 hour earned for every 30 hours worked allowed to pay out. Only an employer that front loads employees time at the beginning of each year, may choose to “cash out” unused sick time at the end of the year, though they are not required to do so.
27.) Q: If an employee uses PTO or protected sick time for a qualifying reason on a day when the employee was not scheduled to work in Portland, is that usage counted against Portland’s Protected Sick Time requirements?
A: No, An employer is not required to allow use of protected sick time for work hours scheduled outside the City of Portland. Conversely, if the employer allows use of sick time (or PTO) for work hours scheduled outside the City, it should also not count against time accrued under the Ordinance for work conducted or leave taken inside the City. (Revised 12/24/13)
28.) Q: Our union employees have “vacation pay”, which is money that is either deposited into their Vacation Pay Account or paid into their paycheck, per their election. Is this in compliance with the protected sick time rules?
A: Most likely. If the employees are represented by a collective bargaining agreement in the building and construction trades, this type of benefit is expressly defined as PTO in the Ordinance. However, vacation pay needs to accrue at a rate consistent with sick leave accrual rates at 1 hour sick time for every 30 hours worked up to a minimum of 40 hours allowed to be earned in a year. (Revised 12/24/13)
For Example: If an employee earns $20/hour then they should have $20 of pay contributed to their vacation pay account for every 30 hours they work. Or 1/30th of that amount for each hour they work ($0.66/hour) for up to 40 hours through the course of the year. To determine the hourly contribution necessary under the ordinance, take the base wage and divide by 30. The result is the minimum hourly contribution required by the ordinance ($20/30 = minimum hourly contribution) If the amount that goes into the account is as good as or better than this ratio then no changes are needed. If it does not meet this contribution rate then a correction to the agreement to reach that amount would be necessary.
29.) Q: What happens when an employer has employees who work in Portland and other cities?
A: The law only covers employees who work 240 hours or more in the City of Portland. For those employees, only their hours spent working in Portland must be counted toward their accrued sick time. Additional hours spent working outside of Portland are not required to trigger sick leave accrual (but of course an employer can choose to include those non-Portland hours; the law is simply a minimum floor).
30.) Q: What if the company has 6 employees but only one of them works in the City on a regular basis, does the company have to pay paid sick time?
A: Yes, it doesn’t matter where your business is located, if the employee works in the City then the employee can earn sick time for hours worked in the City. In this case the employee earns paid sick time because the business has 6 or more employees.
CALCULATING SICK TIME:
31.) Q: How does an employer know how much time an employee spends working within the city limits? (New on 12/24/13)
A: An employer may make a reasonable estimate of an employee’s time spent working in the city for purposes of leave accrual and use. Documentation of how the reasonable estimate was derived may include, but is not limited to, dispatch logs, delivery addresses and estimated travel times, or historical averages.
32.) Q: What happens when an employer has employees who work in Portland and other cities? (New on 12/24/13)
A: The law only covers employees who work 240 hours or more in the City of Portland. For those employees, only their hours spent working in Portland must be counted toward their accrual of protected sick time. Additional hours spent working outside of Portland will not trigger sick leave accrual - but, of course, an employer can choose to include those non-Portland hours as the law is simply a minimum floor.
33.) Q: How does an employer calculate an hourly sick time accrual for a salaried employee who has not set schedule?
A: For employees who are paid an annual salary and are exempt from overtime laws as provided under the Fair Labor Standards Act and/or state wage and hour laws, the hourly base rate can be determined by dividing the annual salary by 52 to get the weekly salary and dividing the weekly salary by the number of hours of the employee’s normal work week. (Revised 12/24/13)
34.) Q: If an employee is paid commission only, is the rate of pay for protected sick time usage minimum wage?
A: Yes – the minimum wage should be considered the base wage for employees that work only on commission.
35.) Q: If an employee works for tips, how should an employer calculate the rate of pay when that employee uses protected sick time? (New 12/24/13)
A: Employees that earn tips should be paid at their regular base wage (not including tips) when they use protected sick time.
36.) Q: How does an employer who does prevailing wage work and private work in the city limits calculate the sick leave pay that an eligible employee would receive, when different hourly rates are used for employees depending on the project?
A: In this case, treat the employee much like a salaried employee where you establish a base rate of pay from which to extrapolate the cost of sick leave on an hourly basis. Develop a method for averaging out what an employee in that position earns over the course of a month or averaged over a yearly basis, to then determine how much to pay the employee when they are sick on a day that they are scheduled to work. The important thing is to be able to justify to an enforcement agency how you came to your number and why you consider it a fair wage for use of sick time.
37.) Q: What records need to be kept for Employees earning and using Sick Time? (New -12/24/2013)
A: The employer must track employees’ accrual and usage (See PTO exceptions) of sick days and keep records in a manner consistent with current standards regarding employment records under state law. (Revised 12/24/2013)
38.) Q: Does an Employer who has a PTO in place need to keep records? (New 12/24/13)
A: The Administrative Rules state: “An employer with a PTO policy in compliance with the Ordinance is not required to maintain records showing Employee reasons for use of the paid leave.” A PTO is a policy that allows paid time off of both Vacation and Sick Leave so an employee can take it for either. Record keeping will be necessary to keep track of use just not type of use. This applies in both the frontloaded and the earned PTO situations.
39.) Q: Are there rules about when and how employees must report taking their sick time?
A: An employer must have a reasonable written policy or standard for employees to follow when they need to call in sick (for themselves or a family member). When leave is foreseeable, employees are required to contact the employer according to the requirements of the written policy, such as in the case of a preventive care appointment. If leave is foreseeable, the employee should also make a reasonable effort to schedule leave in a manner that does not unduly disrupt operations for their employer. Where sick leave is not foreseeable, employees must notify their employer before the start of their shift or as soon as is practicable.
NOTICE & POSTING:
40.) Q: What notice is an employer required to give employees about their rights under the ordinance? (New 12/24/13)
A: All employers must post and provide notice to any and all current or newly hired employees who are, or may be working within the city limits of the City of Portland of their rights under this Ordinance. Sample notices to send to employers can be found here: http://www.portlandoregon.gov/sicktime/article/472690. The required poster can be found here: http://www.portlandoregon.gov/sicktime/article/472245.
Employers are also required to give a written notification each quarter to each employee of the amount of accrued and unused sick time available to that employee.
41.) Q: What type of Notification do I need to provide to the Employee? (New 12/24/13)
A: Employers must provide notice to employees about their rights under the new law and display a poster outlining protections for workers. And a written notice that describes the law. The poster can be copied and sent as the written notice.
42.) Q: Can employers with employees not regularly based in the City avoid liability by not providing advance notice to employees of requirements to perform work in the City?
A: All employers must provide notice to current or newly hired employees who are or will be working in the city limits of the City of Portland, of their rights under this ordinance.
USE OF SICK TIME:
43.) Q: What can employees use sick time for?
A: Employees can use their accrued sick time to care for their own health or the health of a family member, or to address issues caused by domestic violence, sexual harassment, and assault or stalking.
Family member has the same meaning as in ORS 659A.150 and includes the spouse of an employee (including same sex domestic partners), the biological, adoptive or foster parent or child of the employee, the grandparent or grandchild of the employee, a parent-in-law of the employee or a person with whom the employee was or is in a relationship of in loco parentis.
Sick time may be used in increments of one hour, unless the employer opts to allow employees to use smaller segments of leave. . Employees may also use protected sick time to cover all or just part of a shift. Where it is physically impossible for an employee to start or end work part way through a shift, the entire time the employee is forced to be absent may be counted against an employee’s sick time. (Revised 12/24/13)
44.) Q: Is Sick Leave paid based on the number of employees when the time is taken rather than when it was earned? (New on 12/24/13)
A: When the time is taken.
45.) Q: Is an employer at risk for even mentioning that an employee is sick every Friday? (New on 12/24/13)
A: If the employee exhibits a pattern that suggests abuse, the employer may raise that with the employee and require documentation to account for the pattern of absences.
46.) Q: Can an employer require medical verification for the use of sick leave? (New on 12/12/13)
A: In cases where an employee is absent for more than three consecutive days, or in cases where the employer has established a pattern of abuse of sick time by the employee, the employer may require verification of the need for leave before any paid or unpaid sick leave is approved. Examples of verification include:
- A note from a licensed health care provider; or
- Other documentation for survivors of domestic violence, harassment, sexual assault or stalking include: a policy report, a copy of a protective order, documentation from an attorney, law enforcement officer, health care professional, clergy member, or victim services provider
- A signed personal statement from the employee that the sick time was needed for a purpose covered by this law
Under existing Oregon law the employer is required to pay the costs associated with procuring verification. As an alternative, an employer may instead require the employee to submit a signed personal statement that the leave was for a purpose covered by the law.
47.) Q: Is it reasonable for an employer to determine that an employee’s pattern of taking protected sick time only when they are scheduled to work in the City, indicates a pattern of abuse?
A: All situations are different and depend upon the actual circumstance, which requires discretion on the part of the employer. It could be that such a situation is a pattern, it may also be circumstantial and it is incumbent upon the employer to prove.
48.) Q: What about existing absence control policies? (New on 12/12/13)
A: Authorized use of sick time under the ordinance cannot be used as a reason for taking an adverse employment action against an employee under an employer’s absence control policy. An employer cannot take an employee’s authorized sick leave into account when rating that employee’s attendance record for the purposes of awarding a benefit, such as a raise, premium or bonus.
49.) Q: Are employees allowed to trade shifts with other employees instead of taking protected sick time? (New on 12/12/13)
A: Shift trading is allowed if mutually agreed upon by the employer and employee and if the trade takes place in the same or next pay period. However, the employer may not require employees to find a replacement to “cover a shift” as a condition for taking the sick time. An employer also cannot require employees to work an alternate shift to make up for using their accrued sick time.
50.) Q: Are employees required to find their own replacement when they take protected sick time? (Revised 12/24/13)
A: No – under this Ordinance the employee is not responsible for finding a replacement worker when they miss a shift to take protected sick time.
51.) Q: How will the ordinance be enforced? When will enforcement begin? (New 12/24/13)
A: The City has contracted with the Bureau of Labor and Industries to enforce the ordinance. BOLI will also provide technical support to employers with questions about the law.
52.) Q: What is the “safe harbor” period?
A: This period of time was suggested by the State Bureau of Labor and Industries (BOLI) who are to be the enforcement body for the ordinance. The safe harbor period is intended to give employers a reasonable amount of time to get up to speed on the new law and implement administrative procedures. There will be an “easing in” period from January 1 to July 31, 2014. During that time, BOLI will enforce the law by requiring violators to: 1) remedy the problem within 30 days and 2) compensate any employees who were not able to accrue or take the required sick time. ). If the company moves into compliance, BOLI will consider the matter closed. BOLI intends to assess civil penalties during the easing in period only if the agency finds that a business intentionally disregarded the ordinance and acted egregiously against its employees. (Revised 12/24/13)
Read the complete Portland Sick Leave Ordinance and find other useful materials for employers on the City of Portland’s web site at: www.portlandonline.gov/sicktime
Nothing on this FAQ is intended as legal advice. Any responses to specific questions are based on the facts as we understand them, and not intended to apply to any other situations. If you need legal advice, please consult an attorney. We attempt to update the information on this website as soon as practicable following changes or developments in the laws and rules affecting Oregon employers, but we make no warranties or representations, express or implied, about whether the information provided is current. We urge you to check the applicable statutes and administrative rules yourself and to consult with legal counsel prior to taking action that may invoke employee rights or employer responsibilities or omitting to act when required by law to act.