Legislative Developments in Employment Law

In 2015, Oregon continued to lead the nation in its progressive approach to employment law.  It passed a number of laws that address many employee issues that are defining the current presidential campaign, from an unprecedented structure for minimum wage to sick leave rights. This article summarizes the most significant changes that will not only impact companies conducting business in Oregon, but may also influence other states in addressing employee rights and benefits. However, each law has unique details and nuances beyond the scope of this article.  For that reason, we urge you to contact an experienced Oregon employment attorney if you have questions about any of the specific changes highlighted in this article.
 
Minimum Wage Increase
 
Oregon is the first state to implement a tiered minimum wage system that sets different hourly rates in different parts of the state. Beginning July 1, 2016, Oregon's minimum wage will increase to $9.75 per hour, and it will continue to increase each year for the next six years, adjusting for inflation thereafter.  By 2022, the minimum wage will be $14.75 within the City of Portland's urban growth boundary, $12.50 in "nonurban" rural areas, and $13.50 in remaining areas.
 
The law does not specify a method for an employer to determine its location for purposes of paying minimum wage. Nor does the law specify how employers can determine the appropriate minimum wage for those employees who travel throughout the state on a regular basis. Instead, the law directs Oregon's Commissioner of the Bureau of Labor and Industries to adopt rules for determining an employer's location. We do not yet know when the new rules will be released.
 
Mandatory Sick Time
 
As of January 1, 2016, Oregon requires all employers with one or more employees in Oregon to provide sick time to those employees.  If the employer employs ten or more employees in Oregon, the sick time must be paid.  If the employer employs fewer than ten employees in Oregon, the sick time need not be paid.  If the employer has some type of operation in the City of Portland, then the threshold to provide paid sick time is six employees.
 
An employer may use one of two methods to provide sick time under the statute.  The first method is the accrual method under which an employee accrues one hour of sick time for every thirty hours worked.  (Exempt employees are presumed to work 40 hours per week unless their normal work week is less than 40 hours, in which case the actual number of hours worked is the basis for accrual.)  An employee may earn and use up to 40 hours of sick time per year.  Under this method, the employee begins to earn and accrue sick time on the first day of employment.  The employee may carry over up to 40 hours of accrued and unused sick time from one year to a subsequent year.
 
The second method is to front-load an employee's sick time bank of at least 40 hours at the beginning of each year as normally defined by the employer for employment purposes.  For the first year of employment, the employer may pro-rate the front-loaded time for those employees who are hired after the beginning of the year. Under the front-loading method, the employee must have access to all 40 hours of sick time as soon as the employee becomes eligible to use sick time. An employer that front-loads sick time does not need to provide carry-over.
 
Generally, an employee may begin to use sick time on the 91st calendar day of employment and, if the employer uses an accrual method, the employee may use sick time as it is accrued.  Employees already employed by the employer on January 1, 2016 (even those employed for fewer than 91 days) may begin to use sick time as soon as it is available to them.  Paid sick time must be paid at the employee's regular rate of pay.
 
If an employee is separated from employment and rehired within 180 days of the separation, the employer must restore the employee's previously accrued and unused sick time.
 
The statute provides that the sick time may be used for a number of purposes and not simply because of the employee's own illness, injury, or health condition.  Sick time may also be used for an illness, injury, or health condition of a family member (spouse, parent, child, parent-in-law, grandparent or grandchild).  Sick time may also be used in the case of harassment, domestic violence, sexual assault or stalking of employees or their minor children or dependents or if a public health emergency excludes the employee from the workplace or the employee's children from school or a care facility.

The law prohibits discrimination and retaliation based on an employee's use of sick time, requires posters, and sets out specific requirements for notice and documentation.  Covered employers should revise their policies to ensure they are compliant with Oregon law.
 
"Ban the Box" Law
 
Both Oregon and the City of Portland joined the "second chance" movement this year by prohibiting employers from excluding an applicant from an initial interview solely because of a past criminal conviction.  However, the two laws differ from each other, and the Portland Ordinance is stricter on employers.
 
Specifically, under Oregon law, employers cannot require an applicant to disclose a criminal conviction on an employment application, before an initial interview, or, if no interview is conducted, before making a conditional offer of employment.
 
By contrast, under the Portland Ordinance, employers with six or more employees, at least one of whom works a majority of the time within the City of Portland, cannot ask about or access criminal backgrounds before a conditional offer of employment. In addition, the Ordinance requires that employers conduct an analysis of whether rejecting an applicant because of his or her criminal background is job-related and consistent with business necessity.
 
Provision of Health Insurance Benefits Under Oregon Family Leave Act (OFLA)
 
Starting on January 1, 2016, OFLA-covered employers that provide group health plan coverage to their employees must provide employees on OFLA leave the same coverage, under the same terms, and in the same manner as if the employees had continued to work. This means that if employees regularly make any required contributions toward the health care premiums, they will be required to continue those contributions during the period of leave.  If employees ordinarily do not make such payments, they cannot be required to start doing so while they are on leave. This change brings OFLA in line with the Family Medical Leave Act, which applies to employers of 50 or more employees.
 
Disclosure of Wage Information
 
Beginning January 1, 2016, it is an unlawful employment practice in Oregon to take specified adverse employment actions against an employee in connection with an employee's disclosure of wage information.  Specifically, the law protects an employee who (1) inquired about, discussed or disclosed in any manner the wages of the employee or another employee; or (2) made a charge, filed a complaint or instituted (or caused to be instituted) an investigation, proceeding, hearing or action based on the disclosure of wage information by the employee.  The law specifically excludes from this protection employees who have access to wage information of employees as a part of their job functions and who disclose the wages of those employees to individuals not authorized to have access to the information, with certain exceptions relating to charges, complaints, investigations, proceedings, hearings or actions.
 
Noncompetition Agreements

Employee noncompetes are strictly controlled by statute in Oregon.  The most recent change in statutory restrictions involves the permissible term of an employee noncompete.  Previously, the permissible term was two years from the date of the employee's termination.  The new law reduces the permissible term to eighteen months following termination of employment.  The law applies to employee noncompetes entered into on or after January 1, 2016.  The law does not affect employee noncompetes already in existence.
 
Social Media Protection
 
It is already an unlawful employment practice in Oregon for an employer to require access to employees' personal social media accounts or to require employees to disclose their social media account user names and passwords. Beginning on January 1, 2016, an employer may also not require an employee or job applicant to establish or maintain a personal social media account. Moreover, employers may not require employees or applicants to authorize the employer to advertise on the employees' or applicants' social media accounts.
 
Domestic Violence Leave Changes
 
An eligible employee who takes leave due to domestic violence, harassment, sexual assault, or stalking now may use accrued sick leave or personal business leave in addition to paid accrued vacation leave or any other paid leave offered in lieu of vacation during the leave period.  The law applies to employers with six or more employees in Oregon, who work 20 or more calendar workweeks in a year. 
 
Consumer Identity Theft Protection Act Expanded
 
The 2015 Legislature has passed several amendments to the existing law covering identity theft and data breaches in Oregon.  In addition to expanding protected personal information, the amendments also modify the notice requirements to affected individuals in the event of a data breach.

Blerina Kotori is a Labor & Employment lawyer at Tonkon Torp LLP, in Portland, Oregon. She advises and represents employers in matters involving discrimination, retaliation, FMLA/OFLA and other leave laws, wage and hour, sexual harassment, non-competition, disability, and employment benefits. Blerina further specializes on data privacy and security and assists companies with dealing with data security breaches. Blerina's practice includes litigation on non-competition disputes, trade secrets, fiduciary duties of employees, discrimination, harassment, and retaliation. She is a frequent speaker on labor and employment issues, including HIPAA and employment benefits, dealing with mental disorders, social media, and privacy issues.

Blerina can be contacted on 503.802.2055 or by email at  blerina.kotori@tonkon.com