Oregon Becomes the 10th (9th?) State to Enact Paid Family and/or Medical Leave Legislation

Posted on: August 7, 2019 0

By Marti Cardi, Vice President Product Compliance

August 8, 2019

 

It’s getting hard to come up with creative captions for articles about these new state paid family and medical leave laws.  And darn it, can we say Oregon is the 10th state when one of the jurisdictions counted is the District of Columbia?

Well that’s my rule and I’m stickin’ to it.

You can see our tally of the states in our recent blog post on Connecticut’s leave law (we get to our number by including Hawaii, which has a paid medical/disability law but not aid family leave – yet!).  What has Oregon passed, and how does it compare to other recent PFML laws?  Glad you asked: read on!

The Best Paid Leave Law?

Recently, each new state to join the PFML bandwagon proclaims that it has just passed the “best” or “most generous” paid leave law, and Oregon is no exception.  But how do you measure that?  If it’s by the top percentage a low-wage worker can receive, then Oregon does take the cake, proposing to pay benefits up to 100% of earnings in the case of a worker who earns at or below 65% of the state’s average weekly wage.  Just last month Connecticut had claimed that honor with a benefits formula that will pay some workers up to 95% of their wages during leave.  (See our Connecticut blog post.) And based on the current AWW for Oregon at $1044.40 (through June 30, 2020), that puts Oregon’s maximum benefit at over $1250 per week – also beating out the competition by that measurement.

Duration of Benefits.  But there are other ways to measure which state offers the “best” benefits to employees, such as length of paid leave and the reasons for which an employee can take paid leave under the law.  Oregon will provide up to 14 weeks of paid leave per benefit year (12 weeks total for all leave reasons plus another 2 weeks if an employee is incapacitated by pregnancy or related conditions).  That 2-week baby bump is becoming common – Connecticut and Washington are doing the same, for example.  But Massachusetts beats Oregon overall with up to 20 weeks of leave for the employee’s own serious health condition; and both Massachusetts and Connecticut provide up to 26 weeks for care of an ill or injured servicemember.

Leave Reasons.  Oregon is neck and neck with other states as to who offers the “best” benefit when measured by covered leave reasons.  Oregon’s PFML will not cover leave specifically to care for an ill or injured servicemember (although that could form the basis for leave to care for a family member with a serious health condition, generally).  Nor will it cover leave for military exigencies, although that type of job-protected but unpaid leave is available under another Oregon statute.

On the other hand, Oregon will provide “safe leave” for reasons related to the employee or the employee’s minor child being a victim of domestic violence, harassment, sexual assault, or stalking.  Currently only New Jersey offers such paid leave (due to amendments to their law earlier this year, but with a very broad class of family members for whom the employee can take such leave – see our blog post here).  Connecticut will also offer paid leave relating to family violence, but only when the employee is the victim.

Family Members. Finally, Oregon is on the forefront when it comes to the family members with a serious health condition for whom an employee can take paid leave.  The latest trend (and there will be more states doing the same) is to include a broad list of the specific family relationships that are covered by the law (see the chart below) AND include coverage for someone who is “like a family member” to the employee.  Under Oregon’s law this is defined as:  “Any individual related by blood or affinity whose close association with a covered individual is the equivalent of a family relationship.”  This is in recognition of the changing nature of families in the United States, but it will surely present some administrative challenges to both the state and an employer in trying to interpret and apply this language.  Connecticut and New Jersey have similar covered relationships, and Colorado (expected to pass a PFML law next year) also included this broad category.

The Oregon PFML Law

Here are the key provisions of the Oregon PFML law.  There are many more details, of course, but with contributions over 2 years out and benefits another year after that, we’ll take some time before burying you with all the nitty gritty (much of which we don’t even have yet).  Following the chart are a few more observations, if you are still reading at that point!

 

Issue Provision Bill Sections
Employee Eligibility During the Base Year or Alternate Base Year:

  • Earned at least $1000 in wages AND
  • Contributed to the state PFML Insurance Fund

 

Base Year: first 4 of the last 5 completed calendar quarters
preceding the benefit year (not yet defined)

 

Alternate Base Year:  Last 4 completed calendar quarters
preceding the benefit year

 

Other covered individuals include, under certain circumstances,
self-employed individuals and employees
of a tribal government

§§ 2(1), (3), (5), (8) & (11)

 

Covered Employers All private employers §§ 2(14)(a) & (b)
Total Leave Entitlement
  • 12 paid weeks for all covered
    leave reasons in a benefit year
  • 2 additional paid weeks for
    limitations related to pregnancy,
    childbirth, or a related medical
    condition (including lactation)
  • 4 additional weeks UNPAID for any
    reason covered by Oregon Family
    Leave Act (employee’s SHC, family
    member SHC, mildly ill child,
    bonding, bereavement)

MAXIMUM TOTAL:  18 weeks per
benefit year (14 paid, 4 unpaid)

·        §4
Leave Reasons
  • Employee’s own serious health condition
  • Family member serious health condition
  • Bonding (birth adoption, foster care)
  • Safe Leave (matters related to
    employee or minor child being a
    victim of domestic violence,
    harassment, sexual assault, or
    stalking)

Specifically excludes other leave reasons
covered by OFLA (sick child, bereavement,
military exigencies)

·     §§ 2(17), (19) & (21)
Family Members Spouse or Domestic partner

The following relations to the employee
or employee’s spouse or domestic
partner (includes biological, adoptive,
step, foster, legal ward/guardian,
in loco parentis):

  • Sibling
  • Child
  • Parent
  • Grandparent
  • Grandchild

Any individual related by blood or
affinity whose close association with
the employee is the equivalent of
a family relationship

·     § 2(6), (18) & (20)
Leave Year Calculation Methods “Benefit year” – a 12-month period
to be defined by regulations
§ 2(5)
Leave Increments Benefits payable for leave taken in
increments equivalent to 1 work day
or 1 work week

  • Not clear if employee can take
    shorter increments and add them up
    to equal 1 day or 1 week
  • Increments of 1 work day may be
    taken in nonconsecutive periods of
    leave
§ 12(3) & (4)
Employee Documentation Not yet determined; Director will
establish rules for submitting claims
§ 12(1)(a)
Employee Notice to Employer
  • Written notice 30 days in advance
    for foreseeable leave
  • Less than 30 days’ notice if leave is
    not foreseeable (examples:
    unexpected serious health condition
    of employee or family member,
    premature birth, unexpected
    placement for adoption or foster
    care, or safe leave)
  • If employee commences leave
    without prior notice, must give oral
    notice within 24 hours and written
    notice within 3 days
  • Advance notice for safe leave not
    required if not feasible
§ 9
Employer Notices to Employees
  • Employer must provide written
    notice to employees of the duties
    and rights of an eligible employee
  • Notice must be in the language the
    employer typically uses to
    communicate with the employee
  • Director shall provide a model notice
    for employers’ use
§ 8
Employee Rights
  • For employees employed 90 days
    or more before leave,
    reinstatement to same or
    equivalent position

    • Based on business necessity,
      employers with fewer than 25
      employees may restore
      employee to a different
      position with similar duties
      and same benefits and pay
  • Maintenance of health benefits
    during leave under same conditions
    as if actively working
§ 10
Employee/employer  Contributions
  • Start January 1, 2022
  • Contribution rate to be set by
    Director of OR Employment
    Department
  • Total rate for employer and
    employee contributions may not
    exceed 1% of employee wages

    • Subject to maximum of
      $132,900 of employee’s wages,
      subject to annual adjustment
  • Of total rate, employer pays 40%
    and employee pays 60%
  • Employers with fewer than 25
    employees are exempt from paying
    employer contribution

    • But if a small employer elects
      to pay the employer
      contribution, is eligible for
      grants from the state
§§ 16, 42, 62
Benefits Benefits start 01-01-2023

  • Maximum benefit = 120%
    of state AWW
  • Minimum benefit = 5% of
    state AWW
  • Employees who make 65%
    or less than the state AWW
    are paid 100%
  • Employees who make greater
    than 65% of state AWW are
    paid:

    • 100% of 65% of the
      state AWW     – PLUS –
    • 50% of the employee’s AWW over 65% of the state AWW
§ 7
Private plan “Equivalent plan” that provides equal or
greater benefits and protections
§ 43
Concurrency with Other Leave Laws Leave taken under PFML is

  • Concurrent with FMLA and OFLA
  • In addition to paid sick time under
    ORS §653.606
§§ 5, 6
Interaction with Other Employer Benefits
  • Leave taken under PFML is in
    addition to paid vacation or other
    paid time off earned by the
    employee
  • Employer may allow employee to
    use paid sick time, vacation leave or
    other paid leave earned by the
    employee to replace wages up to
    100% of employee’s AWW
§ 6

 

Other Points of Interest

Here are some additional details that are laid out by the Oregon PFML law.

Localization of Employee Wages – §21.  In some states an employee’s eligibility for PFML benefits is based in the first instance on whether the employee is employed primarily within the state (Washington, for example).  Then other eligibility factors kick in, such as hours worked in the state or earnings of a specified amount.  Under the Oregon law it is possible for an employee who only works a very small amount per year in Oregon to receive benefits.  The statute addresses what employee wages are subject to contributions and count for determining eligibility and benefits:

An employee’s wages shall be used to make determinations under sections 1 to 51 of this 2019 Act if the wages are earned for service:

  1. Performed entirely within this state; or
  2. Performed both within and outside this state, but the service performed outside this state
    is incidental to the employee’s service within the state.

As noted in our chart above, it only takes $1000 in earnings in a base year to be eligible for benefits, but of course benefits will be proportionally small as well.

Counting Employees – § 35.  The method for counting employees for such purposes as the small-employer exemption for paying employee contributions will be determined by the Director.  However, the law requires that the determination be based on the average number of employees employed by the e in the 12-month period immediately preceding the date on which the determination is made.

Equivalent Plans – §§ 43-48.  The Oregon PFML law will allow employers to adopt an “equivalent” plan to provide benefits to employees rather than using the state mechanism.  This option is called voluntary or private plans in other states.  Here are some of the key provisions spelled out in the statute:

  • As is common, the plan must offer benefits that are equal to or greater than the state benefits.
  • The employer may impose a 30-day waiting period for a new employee before offering plan coverage.
  • Employee contributions collected by an employer with an equivalent plan must be used for
    plan expenses and are not considered to be a part of an employer’s assets for any purpose.
  • An approved equivalent plan must remain in effect for at least one year. The employer must submit
    an approved plan for reapproval annually for 3 years after initial approval.
  • Benefits for an employee who is covered under more than one plan will be prorated under each plan.
  • The Director must adopt rules to establish the process by which employers may apply for approval of
    an equivalent plan by September 1, 2021.

Administration by a Third Party – § 34.  Following a competitive bid process, the Director may engage a third party to implement the PFML law and to administer the program thereafter.  This bodes well, as so many of the challenges with the programs in states like Washington and Massachusetts seem to be attributable to the fact that the state staff lacks leave of absence management knowledge and experience.  Use of a third party is not mandatory, however.

MATRIX CAN HELP!  It’s early days yet for Oregon PFML.  As usual, we will be watching for developments and reporting on this blog as new information is available.  In the meantime, you can find our prior blog posts about other state PFML laws by typing the state name in the search box – a wealth of articles about the pending Connecticut, Massachusetts, and Washington laws and the 2019 New Jersey amendments.

AND . . . If your company is interested in the private plan option for Washington or Massachusetts PFML, contact your Matrix/Reliance Standard account manager or send us a message at ping@matrixcos.com.

 

Colorado Passes Living Donor Leave Act

Posted on: June 21, 2018 0

BY MARTI CARDI, VP-PRODUCT COMPLIANCE & GAIL COHEN, DIRECTOR-EMPLOYMENT LAW/COMPLIANCE

Tax credits to reward good employer policies?  Offering tax credits to encourage paid leaves of absence is cropping up more often recently.  The federal government included a tax incentive in the December 2017 Tax Cuts and Jobs Act for employers providing from 2 to 12 weeks of paid family and medical leave for reasons covered by the Family and Medical Leave Act.  Our blog post on this federal tax incentive can be found here.   Some states, such as Connecticut and Utah, have tried to follow the same path this year, introducing tax incentive bills rather than full-fledged paid family and medical leave laws; but so far none has passed except the limited-purpose law just enacted in Colorado.

Colorado’s donor leave incentive law.  Colorado has passed a law creating a state tax credit for employers who voluntarily provide a paid leave of absence for an employee to serve as an organ donor.   The tax credit is limited to leaves of absence up to 10 working days or the hourly equivalent.   An employer may claim as the tax credit 35% of (1) the amounts the employer pays to the employee during the leave of absence; and (2) costs incurred by the employer, if any, for temporary replacement help during the employee’s leave.

The tax credit does not apply to any period during which the employee uses other paid leave already offered by the employer such as vacation, paid time off, or sick days.  In addition, the tax credit is available only for paid leave provided to employees who receive less than $80,000 in annual wages.

The employer must be able to provide documentation from the employee’s medical provider verifying the organ donation to support the claimed tax credit.  Although not addressed directly, this implies that the employer can (and should) require medical documentation from the employee as a condition of receiving the paid leave of absence.

The law will go into effect for leaves of absence on or after January 1, 2020, and sunsets on December 31, 2024.  You can view the full text here.

Colorado’s law does not require employers to provide time off for organ donation, nor does it provide job protection for the leave of absence; that will depend on the employer’s policies.  Several other states do have laws providing employees with time off for donation of an organ, bone marrow, and blood or its components.  See our previous blog post summarizing those state laws here.

MATRIX CAN HELP!  Matrix provides leave, disability, and accommodation management services to employers seeking a comprehensive and compliant solution to these complex employer obligations. We monitor the many leave laws being passed around the country and specialize in understanding how they work together. For leave management and accommodation assistance, contact us at ping@matrixcos.com.