Employment Law Update – Fall 2019

By: HLGR Labor & Employment Team

In this Newsletter:

• Deadlines – EEO-1 Reports, OregonSaves
• Increased Threshold for Overtime Exemption
• Legislative Updates
  • New Requirements for Discrimination and Harassment Policies and Settlements
  • Non-Competition Agreement Requirements Expanded
  • Pregnancy – Discrimination Prohibitions Expanded, Accommodation Requirements Added
  • Notice to Employees of ICE Audit
  • Pay Equity Act Revisions
  • Family and Medical Leave Insurance (Paid Leave)
  • Universal Health Care Task Force
  • Wage Claims Against Construction Contractors – Notice to CCB
  • Garnishment Exemption Increased

Deadlines

September 30: EEO-1 Report Due (Component 2 – hours and pay data) for 2017 and 2018. See https://www.eeoc.gov/employers/reporting.cfm. For questions related to Component 2: EEOCcompdata@norc.org or 877-324-6214.

As a reminder, private employers with at least 100 employees, and some federal contractors, are required to file reports (coverage is beyond the scope of this newsletter – if you’re not sure if you’re covered, please go to the website link, or call your favorite employment lawyer!)

“Component 1 data” (race/ethnicity, gender, and job category) was due 5/31/19.

November 15: OregonSaves. Employers with 5 – 9 employees must either assist employees in signing up for OregonSaves or opting out, or, if the employer provides a sponsored retirement plan, must file a certificate of exemption.

For all other employers, the deadline has passed. For more information, see https://www.oregonsaves.com/, or contact employer technical assistance: (844) 661-1256 or clientservices@oregonsaves.com.

Per SB 164, if the employer misses the deadline to implement OregonSaves by 2 years or more, employees may file a complaint with BOLI. It appears employees may seek their own remedy under BOLI’s processes (that is not entirely clear), but what is clear is that BOLI’s Commissioner may assess penalties of up to $100 per employee, with a maximum total penalty of $5,000. Penalties collected are deposited with the Oregon Retirement Savings Board, not with any individual employee.

Breaking News – Increased Threshold for Overtime Exemption

Effective 1/1/2020, the new minimum salary threshold under the Fair Labor Standards Act (FLSA) will be $35,568/year, or $684/week. This is higher than the minimum under Oregon law (which requires a weekly salary equal to at least the local minimum wage x 40 hours). Most employers are covered by the FLSA.

As a reminder, in order to meet the overtime exemption, an employee must:

• Have the authority and duties required for an executive, administrative, or professional employee, and
• Receive the same salary, week after week, regardless of the quantity or quality of work.

(There are, of course, many details and exceptions to the exceptions, as well as other narrower exemptions in federal and state law, all of which are beyond the scope of this alert. As always, if you have questions, check in with your favorite employment law attorney!)

The generally applicable rule is this: unless an employee meets the criteria for the executive, administrative, or professional exemption, or one of the narrower exemptions available under federal or state law, the employee must receive at least minimum wage for all time worked, and must receive overtime (1.5 x the “regular rate”) for any week in which the employee works more than 40 hours.

Legislative Updates:
Settlements, and Non-Competes, and Family Leave – Oh My!

1. Harassment Policies and Settlements (SB 726)

In this bill, the legislature presumably set out to address the #MeToo movement and the prevalence of nondisclosure agreements in settlements of sexual harassment cases. The final legislation covers far more than sexual harassment, however.

The new law covers discrimination and harassment (which is a type of discrimination) based all the protected classes in ORS 659A.030 (race, color, religion, sex, sexual orientation, national origin, marital status, or age . . .or because of the race, color, religion, sex, sexual orientation, national origin, marital status, or age of any other person with whom the individual associates, or because of an individual’s juvenile record that has been expunged), and the law adds the words “including sexual assault.” Sexual assault has never been considered a subset of sexual discrimination or harassment, but it is now an integral part of the relevant statutes. The new law also covers discrimination and harassment based on military service (ORS 659A.082) and disability (ORS 659A.112).

The new law explicitly covers conduct that occurs offsite and/or after hours.

For any prohibited conduct occurring after 10/1/19, there is a 5 year statute of limitations on bringing claims.

Effective 10/1/20, employers may not require an employee to enter into a nondisclosure and/or non-disparagement agreement “that has the purpose or effect of preventing the employee from disclosing or discussing” the types of discrimination or harassment listed above.

No rehire provisions are also prohibited, in this context.

The only exceptions are as follows:

• when the employee requests confidentiality, and then only if the employee is provided a 7 day opportunity to revoke the signature.
• as part of an agreement with an employee who has been determined to have engaged in prohibited conduct (that is, you can prohibit a harasser from disclosing facts related to the situation, and you can require him or her to sign a no-rehire agreement). In addition, if an employer fires a management-level employee due to discrimination or harassment, and there is a pre-existing severance agreement, the employer may “void” the agreement on that basis.
• an employee who is “tasked by law to receive confidential or privileged reports,” such as the Section 504 disability complaints coordinator.

As of 10/1/20, all Oregon employers must have a policy specifically incorporating the elements of the new law. BOLI is planning to come out with a model policy by the end of the year, but in the meantime, the statute tells us that the policy must, at a minimum:

• provide a process for reporting violations;
• identify the individual responsible for receiving such reports, and identify an alternate;
• state the 5 year statute of limitations and the prohibition on requiring an NDA (etc.), but
• note that an employee may voluntarily request an NDA; and
• “include a statement that advises employers and employees to document any incidents involving conduct prohibited by ORS 659A.030, including sexual assault . . . or conduct prohibited by ORS 659A.082 and 659A.112.”

The policy must be made available to all employees, provided to all new employees at hire, and provided to any employee submitting a complaint.

2. Non-Competition Agreement Requirements Expanded (HB 2992)

In addition to the strict requirements already imposed by Oregon law, employers must now provide a copy of the signed non-competition agreement to the departing employee within 30 days of separation, or the agreement will not be enforceable. The new law applies to agreements signed after 10/1/2019.

As a reminder, under pre-existing law, a non-competition agreement is voidable unless (a) the employee received notice that the agreement would be required in a written employment offer at least two weeks before starting work (or “upon bona fide advancement”); (b) the employee is a salaried exempt employee; (c) the employer has a “protectable interest” (i.e. the employee has access to trade secrets or other sensitive business information); and (d) the employee’s gross compensation exceeds the median income for a family of four, according to the last Census.

3. Pregnancy Discrimination prohibitions expanded, accommodation requirements added (HB 2341)

Refusing to hire, promote, or grant other employment opportunities or benefits based on pregnancy has been prohibited for quite a while. The new law adds a requirement to accommodate temporary restrictions due to pregnancy, childbirth, or lactation; prohibits discrimination based on the need for such accommodation; and prohibits employers from requiring employees to take medical leave if leave could be avoided by providing accommodation.

Pregnancy accommodations are similar to disability accommodations under the ADA and Oregon disability laws. Accommodations can include:

• acquisition or modification of equipment or devices;
• more frequent or longer break periods or periodic rest;
• assistance with manual labor; or
• modification of work schedules or job assignments.

As with Oregon disability laws, the obligation to provide reasonable accommodation applies only to employers with 6 or more employees, and accommodation must be provided unless doing so would pose an “undue hardship” on business operations, as that term is defined by law.

As with most Oregon laws, a notice of these rights must be posted. Notices must also be provided to new employees, and to existing employees within 180 days of the act taking effect. In addition, an employee who notifies her employer that she is pregnant must be provided with the notice within 10 days.

A related change (HB 2593) revises Oregon’s existing law related to breaks for nursing mothers (ORS 653.077). Currently, an employee is entitled to a 30 minute break every 4 hours to express milk, and the employee must provide advance notice to her employer of her intent to express milk after returning to work. Under the new law, such employees are entitled to “reasonable” breaks whenever necessary, and must only give notice “if possible,” but “failure to give notice under this subsection is not grounds for discipline.”

4. Notice to Employees of ICE Audit (SB 370)

Effective 1/1/2020, Oregon law requires employers to notify their employees of any pending audit by immigration authorities “unless prohibited by federal law.” The notice must be provided within 3 business days of receiving notice of inspection or audit, and must be posted “in a conspicuous and accessible location,” in English “and in the language the employer typically uses to communicate” with its employees.

Where the employer knows or has reason to know its employees speak a different language, the employer must also make “reasonable attempts to individually distribute notifications to employees in the employee’s preferred language.”

“The notice shall include:

(a) A copy of the federal agency’s notice of inspection received by the employer;

(b) The date of the inspection;

(c) To the extent the employer knows, the scope of the federal agency’s inspection;

(d) The employer’s obligations with respect to providing information within the scope of the federal agency’s notice of inspection; and

(e) A telephone number, prescribed by the Bureau of Labor and Industries, for a hotline operated by an organization that provides information and advocacy related to immigrant and refugee workers’ rights.”

5. Pay Equity Act Revisions

ORS 652.210 – 230 have been revised to:

• Clarify that a qualifying merit or seniority “system” that can justify a difference in pay must be “a consistent and verifiable method in use at the time that a violation is alleged” to have occurred;
• State that a collective bargaining agreement may set compensation levels based on the distinctions permitted under the statute; and
• Carve out an exception for wage differentials resulting from a medical condition, when the employee requests a change in duties or position and the employer grants the change (i.e. light duty after an accepted workers’ compensation claim has been filed, voluntarily accepted alternate duty under OFLA or FMLA, and/or disability accommodation).

The legislation also made some important and meaningful changes regarding the nature and effect of an “equal pay analysis” (self-audit) that can be used as a defense to penalties.

The statute used to require that the equal pay analysis was “related to the protected class asserted by the plaintiff,” and that the analysis “eliminated the wage differentials for the plaintiff,” but since an employer can’t know what that protected class is (and therefore may have a difficult time correcting related problems) until a plaintiff asserts a claim, those sections were removed. The statute now reads:

(1) In a civil action under ORS 652.230 or 659A.885 (1) alleging a violation of ORS 652.220, the employer may file a motion to disallow an award of compensatory and punitive damages. The court shall grant the motion if the employer demonstrates, by a preponderance of the evidence, that the employer: (a) Completed, within three years before the date that the employee filed the action, an equal pay analysis of the employer’s pay practices in good faith that: (A) Was reasonable in detail and in scope in light of the size of the employer; and (B) Included a review of practices designed to eliminate unlawful wage differentials; and (b) Has made reasonable and substantial progress toward eliminating unlawful wage differentials for the employer’s employees.

Importantly, the statute now adds: “Evidence that an employer has increased an employee’s pay as a result of conducting an equal-pay analysis may not be considered as an admission of liability in a civil action alleging a violation of ORS 652.220.

6. Family and Medical Leave Insurance (Paid Leave) (HB 2005)

The key is not to panic! There are many good reasons not to panic. Contributions to the new paid leave start in 1/1/2022, and employees will be able to take paid leave beginning 1/1/2023, so there is plenty of time to panic – er – prepare. Also, contributions are small, and shared almost equally by employer and employee for most employers (and borne entirely by employees, for small employers). Finally, the time off will overlap with OFLA leave, for the most part, so for employers already covered by OFLA and/or FMLA, neither record-keeping nor absenteeism will be significantly different. The Oregon Employment Department will be working on details, but the core provisions as it stands now are outlined below.

• All employers and employees are covered (very few exceptions, listed at the end).
• Covers up to 12 weeks of paid leave + 2 additional weeks for pregnancy disability/childbirth-related leave.
• For employers covered by OFLA (25 or more employees), the cost is shared by employer (40%) and employee (60%); for smaller employers, the cost is contributed by the employee alone.
  • The premiums are capped at no more than 1% of the employee’s wages
  • The amount of the benefit will be proportionate to the employee’s average weekly wage, with a pre-determined minimum and maximum benefit (much like the unemployment benefit)
  • The benefit will be coordinated by the Oregon Employment Department (OED). The OED will determine the “benefit year,” which could mean the “year” for purposes of Paid Leave is different from the “year” employers already use for sick leave, OFLA, and/or FMLA.

That could create significant difficulties, because: (i) whenever an employee taking Paid Leave is eligible for OFLA and/or FMLA, the Paid Leave will run concurrently with OFLA and FMLA; and (ii) when an employee uses Paid Leave, his/her OFLA is capped.

Recall that, under OFLA, a pregnant female employee could be eligible for up to 36 weeks of leave in one leave year using a combination of personal family and medical, pregnancy disability, parental, and sick child care leave, and an employee with a pregnant spouse or domestic partner could be eligible for up to 24 weeks of leave in one leave year, using a combination of parental and sick child care leave (plus other family and medical leave).

The new law limits the total amount of time off per year, if the employee chooses to file a claim and use the Paid Leave benefit: no more than 16 weeks total (12 weeks Paid Leave plus 4 weeks unpaid leave), or 18 weeks total (14 weeks Paid Leave plus 4 weeks unpaid leave) if the employee uses the 2 additional weeks of pregnancy disability/childbirth leave.

Therefore, if the leave year for Paid Leave is different from the leave year for sick leave and/or OFLA and FMLA, it will be difficult to track the overlap, and determine when the employee has reached the maximum.

• Paid Leave is in addition to other paid leave already available to the employee. That includes paid sick leave under the Oregon Sick Time Act and/or under employer policy, and any other vacation or PTO offered by the employer.
  • Paid Leave is not available while receiving workers’ comp benefits.
• Qualifying absences are in part a subset of OFLA absences, in part an addition to OFLA absences:
  • Serious health condition (as defined in OFLA) of the employee or employee’s family member;
  • Parental leave (as defined in OFLA – bonding with newborn or newly-placed child through adoption or foster care system)
  • “Limitations related to pregnancy, childbirth, or a related medical condition, including lactation”

(This appears to be similar to pregnancy disability leave, but it is unclear what this means – must a female employee have medical “limitations” related to lactation to utilize the extra Paid Leave available for this purpose, or is this leave available to allow a female employee to stay home for lactation purposes, and if the latter, is that in addition to the parental leave?)

• • Domestic violence/harassment/stalking leave (ORS 659A.272) – note that this type of leave is not covered by OFLA, but is covered by the Oregon Sick Time Act

Certain types of leave covered by OFLA, FMLA, or the Oregon Sick Time Act are not covered by Paid Leave:

• • Sick child care
  • Bereavement leave
  • Oregon military family leave
  • Other leave covered only by FMLA: Exigency leave, Military Family Leave
  • Ordinary illnesses and preventative care covered by the Oregon Sick Time Act
  • Public health emergency covered by the Oregon Sick Time Act
• Employers must provide written notice to employees regarding their “duties and rights,” including the duty to provide notice before taking leave, the right to be free from retaliation for “inquiring about” Paid Leave, the right to appeal a decision made by the OED regarding Paid Leave, and the confidentiality of all records related to Paid Leave. The OED will provide a sample notice to employers.
• Family member – expanded definition: in addition to the family members covered by OFLA (spouse, same-sex domestic partner; parent/stepparent/in-law; child, step-child, foster child, adopted child; grandparent; grandchild), Paid Leave covers:
  • The employee’s siblings and stepsiblings, and the spouse or domestic partner of the employee’s siblings/stepsiblings
  • Child’s spouse or domestic partner
  • Parent’s spouse or domestic partner
  • Grandchild’s spouse or domestic partner
  • “Any individual related by blood or affinity whose close association with a covered individual is the equivalent of a family relationship.”
• Individuals not covered: Independent contractors, volunteers, federal employees (it’s a short list, as noted above!)

7. Universal Health Care Task Force (SB 770)

The ambitious plan to implement universal health care passed only because it was transmogrified into a task force to study the idea and come up with proposals. The goal of the 20-member Task Force is to propose “a well-functioning single payer health care financing system that is responsive to the needs and expectations of [Oregonians] . . . :

• Improving the health status of individuals, families and communities;
• Defending against threats to the health of the residents of this state;
• Protecting individuals from the financial consequences of ill health;
• Providing equitable access to person-centered care;
• Removing cost as a barrier to accessing health care;
• Removing any financial incentive for a health care practitioner to provide care to one patient rather than another;
• Making it possible for individuals to participate in decisions affecting their health and the health system;
• Establishing measurable health care goals and guidelines that align with other state and federal health standards; and
• Promoting continuous quality improvement and fostering interorganizational collaboration.”

The members of the Task Force must be appointed by 5/31/2020, must begin work no later than 9/30/2020, and must submit a report with findings and recommendations in time for the 2021 regular session of the legislative session.

The objectives are inclusive and comprehensive, and can be viewed here: https://olis.leg.state.or.us/liz/2019R1/Downloads/MeasureDocument/SB770/Enrolled

8. Wage claims against Construction Contractors (HB 3193)

BOLI will notify the CCB of any wage claims, and in the event wages are found to be due and are not timely paid by the contractor, the CCB may revoke the contractor’s CCB license, impose probation, and/or higher surety bond cost.

9. Garnishment Exemption Increased (SB 519)

Employers receiving a notice of garnishment should receive forms that incorporate the changes, but just so you have a complet(ish) picture of legislative changes, the increases are:

• to $254 for one week or less (up from $218)
• to $509 for any two-week period ( up from $435)
• up to $545 for any half-month period (up from $468)
• $1,090 (up from $936) for any one month period.

“For any other period longer than one week, [the exemption is] $254 multiplied by that fraction produced by dividing the number of days for which the earnings are paid by seven. The amount calculated under this paragraph must be rounded to the nearest dollar.”

Lawyerly Caveat: The information in this newsletter is not legal advice, and receipt of this newsletter does not create an attorney-client relationship. If you have questions about any of the information in this newsletter, and/or the application of legislative changes to any specific changes in your workplace, please consult an attorney!

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