UPDATE: Governor Kate Brown signed the bill into law on August 9, 2019.

Oregon is the latest state to enact a paid family and medical leave law. The law, which will cover all employers with one or more employees working in Oregon, establishes a state-managed insurance program with employers and employees paying into a paid leave insurance fund.

While the law will take effect on September 29, 2019, employers will not be required to begin contributing to the fund until January 1, 2022, and employees will become eligible for benefits beginning in January 2023.

Use of Paid Leave

The program will provide all employees in Oregon who earn at least $1,000 in annual wages with up to 12 weeks of leave per benefit year to be used for any combination of family, medical, and/or safe leave purposes. Leave under the new law can be combined with up to four weeks of leave currently provided under Oregon’s unpaid family leave program, for a total of 16 weeks per benefit year. In addition, employees requiring leave for pregnancy, childbirth and associated medical conditions, including but not limited to lactation, may qualify for an additional two weeks of paid leave for a total of 18 weeks per benefit year.

For purposes of the law, family leave includes leave taken by a covered employee to: (1) care for and bond with a child during the first year after the child’s birth or during the first year after placement of the child through foster care or adoption; or (2) care for a covered family member with a serious health condition. Covered family members include the employee’s spouse, child, parent, sibling or stepsibling, grandparent, grandchild, domestic partner, and any individual related by blood or affinity whose close association with a covered individual is the equivalent of a family relationship.

Medical leave is defined as leave due to the employee’s own serious health condition. Safe leave, on the other hand, includes leave for any of the following purposes:

  • to seek legal or law enforcement assistance or remedies to ensure the health and safety of the employee or the employee’s minor child or dependent, including preparing for and participating in protective order proceedings or other civil or criminal legal proceedings related to domestic violence, harassment, sexual assault or stalking;
  • to seek medical treatment for or to recover from injuries caused by domestic violence or sexual assault to or harassment or stalking of the eligible employee or the employee’s minor child or dependent;
  • to obtain, or to assist a minor child or dependent in obtaining, counseling from a licensed mental health professional related to an experience of domestic violence, harassment, sexual assault or stalking;
  • to obtain services from a victim services provider for the eligible employee or the employee’s minor child or dependent; or
  • to relocate or take steps to secure an existing home to ensure the health and safety of the eligible employee or the employee’s minor child or dependent.

Paid leave time may be taken intermittently in increments of one full day or one work week, as those terms will be defined by the Director of the State’s Employment Department (the “Director”). Any family or medical leave taken under the new law will run concurrently with leave available to an employee under the federal Family and Medical Leave Act (FMLA), where the FMLA is applicable.

Contribution and Benefit Rates

The Director will be responsible for setting a contribution rate for the paid leave insurance fund, and both employers and employees will be responsible for contributing certain percentages (based on total employee wages) to the fund on a quarterly basis. Small employers (defined as those that employ fewer than 25 employees) will be eligible to apply for small grants to cover increased costs incurred from the program. Employers may also apply for approval of an employer-offered benefit plan that provides equivalent family and medical leave benefits.

With regard to benefit amounts, if an employee’s average weekly wage is equal to or less than 65 percent of the state’s average weekly wage, the employee will be eligible to receive 100 percent of their salary while on a covered leave. If an employee’s average weekly wage is greater than 65 percent of the state’s average weekly wage, the employee’s weekly benefit amount will be the sum of 65 percent of the average weekly wage and 50 percent of the employee’s average weekly wage that is greater than 65 percent of the average weekly wage. The bill provides that the Director shall set a maximum weekly benefit amount of 120 percent of the average weekly wage and a minimum weekly benefit amount of five percent of the average weekly wage.

Notice Requirements

Employees must file a claim to receive any benefits, and the Director has sole discretion to approve or deny claims, though the Director will be required to establish an appeals process for denied claims.

Employers can require that employees give 30 days’ written notice prior to taking family or medical leave, and can require an explanation of the need for leave. When 30 days’ notice is not possible because of unforeseeable circumstances, employees or their representatives must give oral notice within 24 hours of starting leave, and must then provide written notice within three days of starting leave. If an employee fails to give proper notice, the Director has the authority to reduce that employee’s first weekly benefit amount by up to 25 percent. For eligible employees requiring safe leave, such employees must provide “reasonable advance notice” of their intention to take leave, unless giving the advance notice is not feasible.

Employers will be required to provide all covered employees a written notice of their rights under the program and the procedures by which to file a claim. The Director will provide a model notice meeting these requirements.

Job and Benefits Protection      

The law provides that employees returning from a covered leave will be entitled to be restored to their same position or, if such position no longer exists, to “any available equivalent position with equivalent employment benefits, pay and other terms and conditions of employment” (or, for small employers as defined above, “a different position with similar job duties and with the same employment benefits and pay”). Employers must also maintain any health care benefits the employee had prior to taking leave for the duration of the leave.

Employees taking leave may not lose any employment benefits, including seniority or pension rights, accrued before the date on which their leave commenced. However, employers are not required to allow an employee to continue to accrue such benefits during a leave period.

Anti-Retaliation and Penalties for Violations

The law prohibits retaliation against an employee for exercising their rights under the program, though the protections against retaliation apply only to eligible employees who are employed by the employer for at least 90 days before taking leave.

Both the Director and employees individually may file civil claims for violations of the law, and the Director can also issue warrants, liens, and penalties for unpaid contributions. If an employer defaults on its contributions to the paid leave insurance fund, top company officials (e.g., corporate officers, partners) may also be held personally liable for such unpaid contributions if they were under a duty to contribute to the paid leave insurance fund in accordance with the law. In addition to any penalties otherwise prescribed under the law, violations of the law will be deemed a Class A misdemeanor.

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We will be following up with additional details on this new law as more guidance is made available.

Rebecca Fishbein, a summer associate in Proskauer’s New York office and a rising 3L at Columbia Law School, co-authored this post.