Conflict Between Oregon Family Leave Act and Paid Family Leave Creates Heartburn for Employers

By Christine M. Zinter - Bullard Law

April 11, 2023

Oregon employers (and their attorney advisors!) are experiencing various degrees of heartburn as they struggle to revise leave policies, employee handbooks, and sometimes collectively bargained agreements, in order to account for Oregon’s new Family and Medical Leave Insurance program (Paid Leave Oregon) that will start paying benefits September 3, 2023.

One of several inconsistencies between the Oregon Family Leave Act (OFLA) and Paid Leave Oregon is the way the two regulations treat the use of an employee’s accrued leave during a period of qualifying leave. On this topic, at least, Oregon’s Bureau of Labor & Industries (BOLI) has released welcome guidance.

Under OFLA, an employee taking family leave “is entitled” to use any paid accrued sick leave, vacation, or any other paid leave offered by the employer in lieu of vacation leave during the family leave. ORS § 659A.174(2). However, under Paid Leave Oregon, an employer “may permit” an employee to use such accrued leave time to “top up” their benefit to receive 100% of their pre-leave wages. ORS § 657B.030(2). Paid Leave Oregon also instructs that when an employee takes paid leave, if that employee is also eligible for OFLA leave, OFLA runs concurrently (as would any FMLA leave).

In short, under OFLA, employees have the right to use accrued PTO on leave; under Paid Leave Oregon, the use is left up to the employer.

Thankfully, in response to a letter of inquiry from multiple public sector employers, BOLI has weighed in on the issue. According to an April 7, 2023, letter from Dylan Morgan, Manager of Employer Assistance at Oregon’s Bureau of Labor & Industries (BOLI), when there is a conflict of laws, the employer must provide the benefit that is more beneficial to the worker. This means that so long as an employee’s claim for Paid Leave is also OFLA eligible (which may not always be the case), the employer must allow the employee to choose whether to top off his or her paid leave benefit.

Naturally, BOLI’s new guidance directing employers the use of accumulated PTO during OFLA-covered leave must be a choice contradicts the understanding, at least in the collectively bargained world, that an employer can require the use of leave. If the Oregon Employment Department (“OED”) chooses to run Paid Leave Oregon similar to Washington (most of Oregon’s rulemaking to date is very similar to Washington’s paid leave program), employers, even those with CBAs, will be prohibited from requiring the use of accumulated PTO. Another Letter of Inquiry is likely forthcoming on this issue.

For further consideration, small employers are not subject to OFLA, some employees will be eligible for Paid Leave while remaining ineligible for OFLA (for instance, employees who do not have enough hours worked to be OFLA eligible), and some claims for Paid Leave are not considered “qualifying reasons” under OFLA. In these circumstances, an employer may be able to deny employees the choice to top off their Paid Leave benefits absent agency clarification or Legislative clarification.

The Legislature has several bills pending that attempt to harmonize various discrepancies between OFLA and Paid Leave Oregon. For instance, SB 481 would change the OFLA eligibility period from 180 days to 90 days, expand OFLA’s definition of “family member,” and add additional qualifying reasons for OFLA leave to mostly match Paid Leave Oregon’s language. As employers begin to dig into the weeds of Oregon’s new Paid Leave program, Bullard Law will continue to be a resource on interpretation, even if the answer occasionally is a “we don’t know yet.”

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