June 2021 culminated in the elimination of COVID-19 restrictions in Oregon and significant changes to the state’s employment laws during the 2021 legislative session. On June 25, 2021, Governor Kate Brown issued Executive Order 21-15 rescinding all remaining COVID-19 restrictions, allowing businesses to operate without a mask mandate or capacity limits, effective at midnight on June 30, 2021. The following day, Oregon’s legislative session adjourned after passing several noteworthy employment bills, including updates related to protected leave statutes, health and safety complaints, non-competition agreements, and discrimination, among others.

Below is a summary of the most significant bills that have been enacted into law.

Leaves of Absence

• Changes to the Oregon Family Leave Act (OFLA) to define a public health emergency, sick child leave, and pregnancy leave. The legislature added a definition for “public health emergency” to clarify that it requires a proclamation by the governor to protect public health. The law expands “sick child leave” to include the need to provide home care due to the closure of the child’s school or childcare provider due to a public health emergency and includes requirements for verification of a school closure. The bill reduces an employee’s eligibility for leave from 180 days to 30 days for any qualifying reason due to a public health emergency. It further provides that any employee who leaves employment and returns within 180 days will have their eligibility for OFLA restored to what it was before they left employment. In addition, the bill changes eligibility for pregnancy leave from “female” employees to “pregnant” employees, to eliminate gender identity as a requirement for pregnancy leave. The new law goes into effect on January 1, 2022.  HB 2474.

• Delayed implementation of paid family leave.  In 2019, Oregon enacted one of the most generous paid leave laws in the country.  During the latest legislative session, the legislature, in a 33-19 vote, delayed several facets of the Oregon Paid Family and Medical Leave Insurance program by one year, including the deadline for creating rules for the policy and the date by which employers will need to begin funding the program, from January 1, 2022 to January 1, 2023.  Employees who qualify for paid leave under the new law will not be eligible for such leave until September 2023.  HB 3398.

Oregon Health & Safety

• Extension of time from 90 days to one year to file complaints with the Oregon Bureau of Labor and Industries (BOLI) for unsafe workplace complaints.  The legislature extended the statute of limitations applicable to employees who file complaints with BOLI regarding discrimination and retaliation for reporting workplace safety complaints from 90 days to one year.  The new timeline makes consistent the statute of limitations for other BOLI claims, including other types of discrimination and retaliation claims.  The bill likely was introduced in response to BOLI’s receipt of numerous workplace safety complaints throughout 2020 as a result of employees’ COVID-19 concerns. HB 2420.

• Presumption of retaliation for adverse actions taken within 60 days after reporting unsafe workplace conditions.  The legislature created a rebuttable presumption of liability against an employer that takes adverse action against any employee within 60 days of the employee’s report of alleged unsafe workplace conditions.  While courts in recent years have consistently held there is a presumption of retaliation or discrimination if an adverse action occurred within a certain amount of time following the protected activity, Oregon’s new law codifies that standard. It therefore behooves employers to ensure they remain vigilant with health and safety protocols and document employee complaints.  The new law went into effect on June 15, 2021.  SB 483.

Non-Competition Agreements

• Non-competition agreements are void rather than voidable, the minimum salary threshold is increased to $100,533 per year, and the maximum restricted period is decreased from 18 months to 12 months. The legislature made a number of changes to Oregon’s non-competition agreement law.  While many legislators supported a ban of non-competes altogether, the legislature declined to enact such a law, but did enact some new statutory requirements that curtail employers’ ability to require employees to enter non-competition agreements.  Effective January 1, 2022, the new law’s most significant changes include 1) making non-competition agreements void rather than voidable; 2) increasing the salary threshold for employees who may be subject to non-competition agreements; and 3) reducing the maximum post-employment restricted period for noncompetition agreements from 18 months to 12 months.  Under the former law, non-competition agreements that did not satisfy the statute’s requirements were merely voidable, which meant the employee would need to take affirmative action to render the agreement unenforceable.  Under the new law, such agreements that do not satisfy the requirements are void as a matter of law, and therefore unenforceable.  Further, while employees who earned a gross salary exceeding the median family income could previously be subject to non-competition agreements, the new law provides that employees must make more than $100,533 per year to be subject to a non-competition agreement.  Finally, non-competition agreements that restrict an employee in excess of 12 months are now unenforceable.  Employers are urged to identify and review any non-competition agreements currently in place to make any necessary revisions to comply with the new requirements.  SB 169.

Discrimination

• Oregon’s CROWN Act. Following several states’ lead, including California, New York, Washington, and Colorado, Oregon passed the CROWN (Creating a Respectful and Open World for Natural Hair) Act by a 28-1 vote to expand existing anti-discrimination laws to explicitly include “physical characteristics that are historically associated with race.”  In particular, the new law prohibits discrimination based on certain hair styles and textures.  The bill goes into effect on January 1, 2022.  Employers are urged to review personal appearance policies to ensure they are compliant with the new law.  HB 2935.

• Driver’s licenses.  Oregon law now prohibits employers from requiring driver’s licenses from prospective employees if driving is not an essential function of the job.  Rather than requiring a driver’s license to verify identification, employers should request other valid identification documents for purposes of I-9 verification forms.  SB 569.

Wages and Unemployment Insurance

• Exemption of hiring and retention bonuses from “compensation.”  Between May 25, 2021 and March 1, 2022, hiring and retention bonuses are exempted from the definition of “compensation” under Oregon’s Pay Equity Act, which was enacted in 2017 and, among other things, prohibits wage disparities between employees on the basis of a protected class for work of comparable character.  In addition, businesses offering vaccine incentives during a public health emergency will be exempted from the definition of “compensation.”  In enacting this rule, the legislature is creating an incentive for business to return employees to the workplace following the COVID-19 pandemic.  Effective immediately, HB 2818 also allows BOLI to pay wage claims from the Wage Security Fund, which is funded by employers, after a final order has been issued if the employer has not paid the owed wages.  HB 2818.

• Unemployment insurance payment amendments.  Recognizing the potentially severe impact on employers after the forced business shutdowns and surge of layoffs due to the COVID-19 pandemic, the Oregon legislature made sweeping changes to the calculation of unemployment insurance rates. The bill specifically amends the determination of “high benefit cost period” to specifically exempt calendar years 2020 and 2021 from the calculation of unemployment taxes for each employer.  The law goes into effect September 25, 2021.  HB 3389.

For additional details on these bills, as well as a discussion of bills that did not pass but will likely be considered in future legislative sessions, please register to attend our upcoming complimentary webinar on July 15, 2021 at 11:00 a.m. PST, “What’s New in Oregon? Employer Update on the 2021-21 Legislative Session in Salem.”