As hopefully all of our Oregon clients know, the Oregon Sick Leave law took effect on January 1, 2016 requiring sick leave for part-time and full-time employees. While the specifics of the law were covered in prior blogs, this blog will concentrate on one aspect of the law: how time off is accrued.
Let us assume you now have a paid time off policy that includes sick and vacation together, and let’s also assume your practice is small enough to where you do not have to offer paid time off, and therefore you only offer paid time off to full time employees after one year of employment while your part time employees and full timers who have worked less than one year receive unpaid leave. Finally, we will assume you use an accrual system for paid and unpaid time off.
When employees are first hired, you are not required to provide sick leave during the first 90 days; however leave starts accruing at a rate of 1 hour for every 30 hours worked. When new employees reach their 91st day of employment, they can start using accrued sick leave. In addition, leave will continue to accrue at 1 hour for every 30 hours worked, not to exceed 40 hours of accrued unpaid time in one year (unpaid in our example). Therefore, when new employees work 30 hours during the week, they receive 1 hour of accrued time off, which is unpaid in our example. You or your payroll company keeps track of the accrued time, and when unpaid leave is taken, you subtract it from the amount accrued. Easy enough.
In this example, full time employees receive paid time off after one year, and let’s assume you offer the same amount of paid time off as employees accrue with the new law (meaning one hour of paid time off for every 30 hours worked, not to exceed 40 hours of paid time off in one year). For example, when full time employees work 35 hours, they receive 1.167 hours of accrued paid time off (1 hour accrued for every 35 hours worked or 35 / 30 = 1.1666). Each week will have a different accrual, and this accrual grows until paid time off is taken. Part-time employees in this example accrue time in the same way except it is unpaid.
Another point to keep in mind is the new law does not require you to offer additional time off as long as you offer the equivalent of 1 hour of leave for every 30 hours worked for a maximum of 40 hours per year. If you already offer that amount of time off or more, then you do not have to provide extra time off to comply with the new law. There are rules about how much unused time off can carryforward each year, but that is outside of our discussion.
The accruing of time off has certainly generated a lot of questions. Hopefully you now understand how to do it under the new Oregon Sick Leave law.