Several years ago, Oregon’s sick leave law, prompted by Senate Bill 454, mandates five days of paid sick leave for full-time employees in businesses that employ 10 or more workers. More recent guidelines relating to COVID-19 have added to these requirements. This guide also addresses Portland’s local leave laws, which require that employers with six or more employees abide by Senate Bill 454 rules.
The Families First Coronavirus Response Act (FFCRA)
The COVID-19 virus has evolved—at least for the time being—regarding how employers support their employees who are sick with the coronavirus disease or who are caring for a family member with the illness. The Families First Coronavirus Response Act (FFCRA or Act) requires certain employers to provide their employees with paid sick leave and expanded family and medical leave for specified reasons related to COVID-19. These provisions will apply from April 1, 2020, through Dec. 31, 2020.
How Oregon Paid Sick Leave Works
In general—including when COVID-19 is not defining sick leave laws for employers—paid sick leave is time that an employee can take away from their job to attend to their or their family’s medical needs, paid by employers at an employee’s regular pay rate. This can include illnesses, doctors’ appointments, or family medical issues. It also includes time taken because of circumstances related to domestic abuse or violence.
While not required by federal law, five days of paid sick leave is required in Oregon thanks to Senate Bill 454. The Oregon sick leave law doesn’t apply to federal employees and may not apply to union employees (depending on what their collective bargaining agreement states).
Oregon paid sick leave laws require that:
- Employers with 10 or more employees must provide 40 hours of paid sick leave to full-time employees each year
- Employers with nine or fewer employees must allow employees to take up to 40 hours of unpaid sick leave
- Employees must be made aware of their sick time balances at least once a quarter
- An employee begins to accrue sick leave on Day One of their employment
- Oregon employees can use their accrued sick leave after 90 days of employment
- Employees should be paid for sick leave at their regular rate of pay
- If employees are paid by commission or by piecework (for example, an assembly line worker who is paid per unit assembled) the rate of sick leave pay is based on the employee’s average earnings (we recommend averaging over at least 90 days)
- Employees may request sick leave, paid time off in increments as small as one hour
- Employees may roll-over up to 40 hours of unused sick leave per year
- Employers may cap sick leave at 80 hours per year
- Rehired employees have a right to reinstate their prior sick leave balances
- Sick leave documentation (i.e., sick leave accruals and payments) must be retained for four years
- The sick leave policy must be provided in the employee’s spoken language
Portland has slightly stricter requirements than the state, requiring employers with six or more employees to offer paid sick leave. For detailed information regarding Portland’s sick leave requirements visit the Oregon Paid Sick Leave website which addresses Portland and state requirements for paid sick leave.
How Oregon & Federal Sick Leave Laws Differ
There are several ways to calculate sick leave and knowing how to approach this task is half the battle. Federal law doesn’t require sick leave to be paid, but there are labor laws like the Fair Labor Standards Act (FLSA) that affect how sick leave should be calculated if it is paid. HR best practices indicate that exempt employees (who are generally salaried and are not paid overtime) shouldn’t be required to take sick time in less than full-day increments (to avoid undermining their exempt status).
The table below summarizes how Oregon sick leave differs from the Department of Labor (DOL) guidelines.
Oregon vs Federal Sick Leave Rules
40 hours (five days) paid sick leave per year for full-time employees
Full and part-time employees are eligible to use their accrued sick leave after 90 days
Regular rate of pay for prior pay period or average pay rate if paid by commission, or piece (but no lower than minimum wage)
Part-time: one hour for every 30 worked
Full-time: 1.33 hours for every 40 worked
Recommends sick leave not be required to be taken in less than half-day increments by exempt staff
Employer must allow employees to use in increments as small as one-hour
Up to 40 hours allowed for carry over to the following year and employer can cap at 80 hours
FMLA requires employers of 50 or more to post leave policy
Posting not required
Policy can be provided in employee handbook
Policy must be available to employee
No waiting period before accruals begin but 90-day waiting period before usage
No requirement for sick leave balances to be reinstated upon rehire
Rehires within 180 days are to be reinstated with prior sick leave accruals intact (if they worked at least 90 days)
Record Retention Rules
If provided, must retain sick leave payment records for three years
Sick leave payment records and policy needs to be retained for four years
Does not apply to federal employees and some union employees
Unused sick leave does not need to be paid out upon termination, unless employer offers to do so
Unused sick leave does not need to be paid out upon termination
While the DOL doesn’t require paid sick leave, and therefore provides few details on how to set up a sick leave policy, Oregon provides instructions, posters, and seminars on their website to help businesses abide by the Oregon sick leave law.
Federal & State Laws That Affect Paid Sick Leave in Oregon
Oregon increases sick leave requirements beyond what’s required by the Family Medical Leave Act (FMLA) in terms of unpaid leave for employers with 50 full time employees. In Oregon, up to 40 hours of unpaid leave must be made available to all employees.
FMLA is a federal law that provides unpaid leave to employees who work in companies that employ over 50 people in one location. This typically allows an employee who has worked at least 1,250 hours per year to take time off for their own—or their family members’—needs. Oregon laws providing for paid sick leave can help offset an employee’s lost wages while on family medical leave such as for maternity leave.
Other federal labor laws such as anti-discrimination laws like the Americans with Disabilities Act and the Pregnancy Discrimination Act, may also impact how you assess or grant sick leave in Oregon. For example, an employee with a disability will be able to use sick leave for medical appointments, or a pregnant employee will be able to use sick leave for doctors’ visits.
How to Calculate Sick Leave in Oregon
Sick leave is calculated at different rates for part time hourly vs salaried employees as well as for employees paid based on commission or piece work. Regardless, accruals need to start on the employee’s first day of employment. Employers can choose to front-load up to five days per year for full time staff, as long as that sick leave time is granted to new hires as a lump sum on their first day of employment.
Hourly Employee Sick Leave Accrual
The easiest way to calculate accruals for hourly staff is to provide one hour of sick leave for every 30 hours that the employee worked, including both regular and overtime hours. This makes it fair for part-time staff who may work fewer hours but will still accrue sick leave at the same 1:30 rate.
Hourly Employee Example
Karen (part-time) worked 42 hours in the bimonthly pay period. She accrued 1.4 hours of sick leave.
42 hours / 30 = 1.4 hours sick leave accrued in the pay period
Salaried Employee Sick Leave Accrual
For employees who are salaried, you can estimate accruals based on a 40-hour workweek by giving each salaried employee 1.33 hours of accrued sick time for every week worked. That ensures that over the course of the year, they’ll reach the 40 hours (five days) per year of paid sick leave required in Oregon.
Salaried Employee Example
Kim (salaried) is paid every other week. She earns 2.66 hours of sick leave each pay period.
1.33 hours per week x two weeks = 2.66 hours sick leave per pay period
Piece-work Sick Leave Accrual Rate
For workers paid by piece or commission, it’s best to front-load the sick leave at five days per year for full-time staff. To calculate the pay rate for sick leave when an Oregon worker is paid by the piece, first determine how many pieces the employee was paid for (and at what rate) and then use the average daily rate to pay sick leave. Just be sure the employee’s hourly sick leave pay doesn’t fall below minimum wage.
Cory assembled 450 units over the past 90 days, earning $25 per unit and averaging 7.5 units per day. The five days of sick leave should be paid at $187.50 per day.
7.5 units average per day x $25 per unit = $187.50 a day
Commission-work Sick Leave Accrual Rate
Calculating sick leave rates for commission-based employees is very similar to calculating piece work. Again, it’s best to provide full-time commission-based employees with five days or 40 hours per year as a flat rate to keep the math simple. To get an hourly rate to pay for sick leave, calculate average commissions, divided by average hours worked.
John earned $17,000 in commissions over the past 90 days, while salaried employees worked 510 work hours. Therefore, John’s sick leave should be paid at $31.33 per hour.
$17,000 in commissions paid / 510 hours = $31.33 an hour
How to Comply With Oregon Paid Sick Leave Laws
The best way to comply with Oregon paid sick leave laws is to follow the guidelines which are outlined in detail by the state. Note that this link offers really helpful Q&A’s to assist you. They describe documenting your sick leave policy along with other policies such as time and attendance and vacation policies in an employee handbook and then posting your sick leave policy in the office or employee break room to share with staff. Keep in mind that your policy needs to be made available in the language your employees use.
Oregon Sick Leave Policy Considerations
Oregon provides two options for employers to process sick leave—a front-loaded leave balance of five days (40 hours) a year provided at the start of each year, or an accrual. Front-loading is easier and can be used for both paid and unpaid sick leave. An accrual may be better if you want to avoid abuse of sick leave hours by new hires, or by employees early in the calendar year.
In fact, you can front-load hours for salary staff and accrue them for hourly staff. Let’s compare both options.
Front-Load vs Accrual Options for Providing Sick Leave Hours
You have options in this area, depending on what works best for you (as long as you are consistent, case by case). You can pay out any unused sick leave balance at the end of each year or roll it over if you provide a front-loaded lump sum amount of 40 hours (five days) at the start of the next year.
How Much Sick Leave
Pay out up to 40 hours of unused sick leave at year-end.
Rollover up to 40 hours of unused sick leave to the next calendar year.
Is a Lump Sum Required at the Start of the Year?
Yes, lump sum must be provided at the start of the year, and new hires must be given sick leave balance upon hire.
No, because sick leave is accrued.
Benefit to Employee
Employees who don’t use their sick leave may get a year end “bonus” if you pay out unused leave.
Employees can rollover up to 40 days at year-end, so they may have up to 80 days accrued over two years.
Employees won’t have more than five days of available sick leave if they have a major illness.
Employees lose anything over the 40 days of accrued sick leave a year if they don’t use it.
Benefit to Employer
Employer doesn’t have to worry about rollovers or accruals, so administration is easier.
Employers don’t have to pay for sick leave that’s not used, and not rolled over. They may save money.
Paying out unused sick leave at the end of the year may cause a huge year-end payroll.
You may experience more staff absenteeism early in the year.
Employer has to calculate accruals each pay period.
Employers may find employees saving up paid leave—and taking more time off at once when they do use it.
Using a software scheduling platform that also offers payroll processing to manage employee leave balances and sick time-off requests can be a huge time saver. We recommend Homebase because it offers multiple tools for small business owners, including managing sick time and other types of leave.
Sick Leave Time Off Increments
Oregon law allows employees to use paid sick leave in timeframes as short as one hour. But as a best practice, the one-hour limit should be used only for hourly employees who are non-exempt (or hourly). Salaried exempt staff should be allowed more flexibility when using paid sick leave because tracking salaried staff activities by the hour might undermine their exempt status.
Paid Time Off vs Sick Leave
It’s a best practice in Oregon to track your employees’ sick leave separate from paid time off (PTO) that’s used for vacation. Some companies do this by setting up two leave policies: one for sick leave and one for PTO, which includes vacation or any other purpose, like an employee taking a “mental health day” or time off for a child’s school visit.
In Oregon, PTO and sick leave do not have to be paid out upon employee termination. However, providing PTO is optional, while providing sick leave is required. If you combine the policies, it may be difficult to keep track of which days are used for what, and how much to roll over each year. For instance, PTO policies are often “use it or lose it,” whereas sick time is not, because employees are allowed to carry over up to 40 hours per year.
City of Portland Expansion on State Sick Leave
Portland is currently the only city in Oregon that has stricter requirements for providing paid sick leave than Oregon requires at a state level. Portland has a Protected Sick Time Ordinance that requires employers with as few as six employees to provide 40 hours of paid sick leave as compared to the state which doesn’t require sick leave to be paid until the employer reaches a staff size of 10. Both require unpaid sick leave to be made available regardless of employer size.
Oregon Sick Leave vs Portland
Sick Leave Risks to Oregon Employers
Like many labor laws in Oregon, there are risks of not complying with Oregon sick leave laws. In fact, if your business is located in Portland, which has stricter regulations, you have to comply with both local (city) sick leave mandates in the location where your employees work, as well as Oregon laws.
Lack of Compliance with Sick Leave Laws
The most common issue that uniformed Oregon business owners might encounter is not realizing they have to offer both unpaid and paid sick leave or they will be subject to fines and penalties. They also can’t estimate accrued sick time hours based on an employee’s salary.
Other sick leave management errors or inconsistencies are less common, but can still be costly. Whether terminating an employee for using sick leave (prohibited), failing to keep sick leave records (risky), or expecting an employee to “make up” their shift (not allowed), there are a few errors to avoid when managing your sick leave policy.
Don’t Require Workers to Provide Documentation for Sick Leave Until Day 4
Unless you suspect a worker is abusing their sick leave, such as calling in every Monday after a weekend binge, don’t ask for a doctor’s note. In Oregon, this documentation is not required, and it’s a best practice not to ask for any documentation until the employee has been out of the office on sick leave for at least four days. Of course, if the employee asks for more than four days and requests the time in advance, such as for surgery, it’s OK to request documentation per your company leave policy.
Don’t Retaliate Against an Employee Who Uses Sick Leave
If a manager punishes an employee in any way (or worse, terminates their employment) for using available paid or unpaid sick leave, the company could be fined. In addition, the employer could be ordered to pay back any lost wages equivalent to if the employee had not been suspended, demoted, or terminated.
Oregon doesn’t allow employers to discipline an employee for taking time off for sick leave such as a doctor’s appointment or illness. However, you are able to discipline them if they fail to notify you per your documented attendance policy (no show/no call), or if they’ve used all their available paid sick and unpaid leave benefit and fail to report to work. Keep in mind there is an exception if the employee is eligible for or applied for FMLA, in which case your FMLA policy takes precedence.
Don’t Average Sick Time Accruals Monthly
Oregon requires full-time employees working 40 hours a week be paid sick time at an accrual rate of 1.33 hours for every 40 hours worked. So even if you pay by month, you still need to determine how many hours an employee worked in that month to calculate sick leave accruals. That’s why some Oregon employers prefer to front-load all 40 hours of paid sick leave at the start of the year.
Avoid Mismanaging Paid Sick Time For “Seasonal” Employees
Seasonal employees’ rights can be difficult to manage in this area. In some, but not all cases, seasonal employees can be eligible for paid sick time. Here is an example: My business has 11 employees, but only for a short period of time as seasonal employees.
This circumstance would require the following action: If an employer had 20 weeks (not necessarily consecutive) in which the daily average was 10 or more (six or more anywhere in the state for employers with operations in Portland), the employer’s employees are entitled to paid sick time. Employers should look at the previous year and determine if there were any 20 weeks over the course of that entire year when the daily average number of employees was 10 or more (again, six or more for employers with operations in Portland).
Scheduling software can be a huge value-added tool when managing sick-time and leave. We have found Homebase. to be a useful resource when managing leave and time-off for employees. This tool offers your team the flexibility to update their availability, request shift trades, and it allows for easy payroll processing since its scheduling and time tracking tools are linked.
Other common risks employers may encounter when administering a sick leave policy in Oregon include failing to abide by record retention requirements or failing to provide required documentation. Don’t make these mistakes:
- Failing to keep sick leave records. Oregon employers are required to maintain four years of sick leave documents , including but not limited to your policy and sick leave time off and payment records.
- Offering sick leave inconsistently. Failing to provide sick leave in a fair and consistent manner can be risky. For example, if a new employee is allowed to use paid sick leave right away, and others are required by policy to wait until their 91st day before taking paid sick leave, you may find your business accused of discrimination.
- Requiring the employee to “make up” work. According to Oregon law, you can’t request the employee to work another shift to make up work when taking sick leave.
- Not abiding by stricter city regulations. Portland has their own requirements for managing sick leave, based on employer size.
- Not providing sick leave policy in the worker’s native language. While not common, you may be hiring employees who speak something other than English or Spanish. In Oregon, you have to provide the sick leave policy in their native language.
Check out the Oregon.gov website for additional FAQs related to Oregon’s sick leave laws.
Although Oregon can be a great place to operate a business, its employment laws differ—significantly in some cases—from other states. Oregon has joined a few other states, such as California, that mandate sick leave for employees. To ensure your business complies with Oregon’s regulations, we recommend outsourcing HR and legal compliance tasks to avoid unnecessary labor law audits and fines. This solution also tends to be a huge time saver for supervisors and small HR teams.