Oregon’s 2021 Legislative Session Brings Significant Changes for Employers

By Naomi D. Johnson and Liani J. Reeves - Bullard Law

July 23, 2021

The Oregon State Legislature adjourned its 2021 session at the end of June, but not before passing a slew of bills, some of which bring noteworthy changes for Oregon employers. Many of the new laws and updates attempt to lessen the significant impact that the COVID-19 pandemic has had on businesses, employers and employees, and to return employees to work. The Legislature also amended certain existing laws related to protected leave, workplace health and safety, and discrimination.

Below is an overview of the most significant of those employment-related bills that have been signed into law.

HB 2818 - Amendments to Oregon’s Equal Pay Act: The Legislature has temporarily amended Oregon’s Equal Pay Act to exclude vaccine incentives from the definition of compensation. This change applies to lawsuits filed on or after April 29, 2021, as well as any pending BOLI complaints that had not yet been decided as of that date. In addition, between May 25, 2021 and March 1, 2022, hiring and retention bonuses have also been excluded from the definition of compensation and applies to any lawsuits or BOLI complaints filed after May 25, 2021. These amendments were made to incentivize employers to return employees to work by allowing employers to safely offer vaccine incentives and bonuses without potentially running afoul of the Oregon Equal Pay Act. Both amendments expire on March 1, 2022. These amendments went into effect on June 23, 2021.

While HB 2818 temporarily insulates employers from possible violations of the Oregon Equal Pay Act arising out of vaccine incentives and hiring/retention bonuses, employers still need to be thoughtful when implementing a vaccine incentive program or treating employees differently based on their vaccination status to ensure those actions do not have a discriminatory impact on a subset of employees who may fall within a protected class under the law.

HB 2474 – Amendments to Oregon Family Leave Act (OFLA): The Legislature amended OFLA by:

• Adding a definition for “public health emergency” to make clear that it requires a proclamation by the governor to protect  public health.

• Expanding an employee’s eligibility for OFLA leave during a public health emergency to employees who have worked at least 30 days immediately prior to taking leave (previously it was 180 days) and an average of 25 hours or more per week during those 30 days.

• Providing that any employee who separates from employment, irrespective of the reason, will have their OFLA eligibility restored to what it was prior to leaving their employment if the employee: (1) was eligible to take OFLA leave at the time of their separation and returns within 180 days; or (2) was eligible to take leave at the beginning of a temporary cessation of scheduled hours of 180 days or less and returns to work at the end of the temporary cessation.

• Expanding the definition of sick child leave to include leave needed to provide home care due to the closure of the child’s school or childcare provider as a result of a public health emergency, and permitting an employer to request verification for the need for this leave.

• Changing the gendered statutory language for pregnancy leave eligibility by striking the word “female” and just referring to an eligible employee.

The new provisions of the law go into effect on January 1, 2022. Employers who are subject to OFLA (who have over 25 employees in Oregon) are encouraged to review and update their existing leave policies to reflect these changes.

HB 3398 – Delayed Implementation of Oregon’s Paid Family Medical Leave Program: The Legislature voted to extend the deadlines to implement Oregon’s Paid Family Medical Leave Program (previously established by HB 2005 (2019). The deadline for the Employment Department Director to adopt rules for Oregon’s Paid Family and Medical Leave Program is extended from September 1, 2021 to September 1, 2022. In addition, the start date for employer and employee contributions is extended from January 1, 2023 to January 1, 2023, and the start date for benefit payment is extended from January 1, 2023 to September 3, 2023. The bill is awaiting the Governor’s signature.
 
SB 483 – Employee-Protected Activities and Workplace Safety: This law creates a rebuttable presumption that an employer retaliated against an employee or prospective employee whenever the employer takes adverse action against them within 60 days after the employee or prospective employee engages in protected activity related to workplace safety, including opposing a legally forbidden practice to the employer, making a complaint or participating in a complaint with the Oregon Occupational Safety & Health (OSHA), or in good faith reporting an assault involving health care services. Employers may rebut the presumption that retaliation has occurred by a preponderance of evidence. If adverse action is taken beyond 60 days, the action does not create a presumption in favor or against a finding that a violation has occurred and does not otherwise modify existing case law regarding proximity of time between a protected activity and an adverse employment action. This law took effect on June 15, 2021. Employers are encouraged to educate their managers and supervisors on this new law.

HB 2420 – Extension of Time to File Complaints with the Oregon Bureau of Labor and Industries for Reporting Workplace Safety Complaints: The Legislature significantly lengthened the statute of limitations that applies to employees who file complaints with BOLI alleging discrimination and/or retaliation for reporting unlawful practices regarding workplace safety from 90 days to one year. This law takes effect on January 1, 2022.

HB 2935 – Oregon’s Crown Act: The Crown (Creating a Respectful and Open World for Natural Hair) Act expands the definition of race-based discrimination in schools and employment to include hairstyles, textures, and hair types. In addition, it provides that schools and employers that have dress codes and policies may not disproportionately adversely impact a member of a protected class. The bill also prohibits a school district from being a member of any voluntary organization that administers interscholastic activities if the organization does not have equity-focused policies that prohibit discrimination in education and permit students to wear religious clothing in accordance with the student’s sincerely held religious belief and consistent with any safety and health requirements. This law takes effect on January 1, 2022. Employers and school districts are encouraged to review and update their existing policies to reflect this new law.

SB 569 – Limits Imposed on Driver’s License as Condition of Employment: The Legislature made it an unlawful employment practice for an employer to require an employee or prospective employee, as a condition of employment or continuation of employment, to possess or present a valid driver’s license unless the ability to drive legally is an essential function of the job or is related to a legitimate business purpose. The Legislature also made it an unlawful employment practice for an employer to refuse to accept from an employee or prospective employee other forms of identification deemed acceptable for purposes of federal forms used to verify identification or employment authorization (Form I-9). This law goes into effect on January 1, 2022.

SB 169 – Non-Competition Agreements in Oregon: The Legislature has again modified Oregon’s statute on non-competition agreements to restrict further an employer’s ability to require its employees to enter into non-competition agreements. The new law, which applies to non-competition agreements entered into on or after January 1, 2022, will be void as a matter of law, and consequently unenforceable (as opposed to being voidable by one party) unless they comply with the following requirements:

• The non-competition period does not exceed 12 months after the end of the employee’s employment (reducing the previous cap of 18 months).

• The employee’s annual gross salary and commissions at the time of their termination exceeds $100,533 (which will be adjusted annually for inflation).

• The agreement must be in writing (it cannot be oral).

• The employer must, within 30 days after the date of the termination of the employee’s employment, provide the employee with a signed, written copy of the non-competition agreement.

While these amendments apply on a going-forward basis, i.e., January 1, 2022 forward, employers are encouraged to review and update their standard form non-competition agreement to ensure they comply with these changes.

SB 716 – Predictive Scheduling Amendment Related to Child Care Needs: This law amends Oregon’s predictive scheduling law applicable to retail, food service, and hospitality employers with 500 or more employees by including “child care needs” as an identifiable limitation or change in an employee’s work schedule availability. Covered employers are encouraged to educate their managers and staff on this change. This law took effect on June 3, 2021.

HB 3389 – Unemployment Insurance Payments: Due to the record-high number of unemployment insurance claims during the COVID-19 pandemic, the Unemployment Compensation Trust Fund that employers pay into that is used to pay benefits to eligible workers has been depleted, triggering a higher tax rate imposed on employers for the next several years. House Bill 3389 modifies requirements regarding the calculation and payment of unemployment insurance taxes to provide employers immediate and longer-term relief. Among the changes, the bill provides that the experience rating used to determine an employer’s 2020 tax rate will also be used in 2022, 2023, and 2024. It also allows employers to defer payment until June 30, 2022, of up to one-third of tax owed in 2021 if their tax rate increased by at least 0.5 percentage points between 2020 and 2021. Tax deferrals do not accrue interest or penalties, and a percentage of deferred 2021 taxes may be forgiven depending on the amount the employer’s tax rate increased in 2021 and if the employer is in good standing.  Once signed by the Governor, the law will go into effect on September 25, 2021.

If you have any additional questions or concerns about how these laws impact your workplace, please contact a Bullard Law attorney for assistance.