To delay or not delay, that was the question. Well, the wait is finally over. After much anticipation and more drama than Shakespeare's Hamlet, Oregon has decided that its PFML program is sufficiently solvent to proceed on September 3, 2023!

However, there is so much more going on in Oregon – more than Shakespeare's 154 sonnets. Oregon had a very active legislative session relating to the job-protected but unpaid Oregon Family Leave Act ("OFLA") and the Oregon Paid Family and Medical Leave Act ("OR PFML") – and we expect continued heavy engagement in PFML regulatory rulemaking even after the current "go live" date.

Senate Bill 999 was enacted to better align OFLA and OR PFML. The significant changes are summarized below:

Expanded definition of "Family Member": SB 999 expanded the definition of a covered family member in OFLA to align with OR PFML. Effective July 1, 2023, the new definition under OFLA (which is the same under OR PFML) includes the following relationships to a covered individual:

spouse/domestic partner;
child or the child's spouse/domestic partner;
parent or the parent's spouse/domestic partner;
sibling/stepsibling or the sibling's/stepsibling's spouse/domestic partner;
grandparent or the grandparent's spouse/domestic partner;
grandchild or the grandchild's spouse/domestic partner;
any individual related by blood or affinity whose close association with a covered individual is the equivalent of a family relationship.

Alignment of Benefit Years: Since its inception, OR PFML has defined a benefit year as the 12-month benefit year beginning the Sunday prior to when the employee first takes leave. This is a forward-looking measurement.

Currently, OFLA and the federal Family and Medical Leave Act ("FMLA") have 4 different possible benefit year calculations and an employer selects one of them; those 4 calculation options do not include the precise definition from OR PFML.

SB 999 states that next year beginning July 1, 2024, the benefit year calculation under OFLA must mirror that under OR PFML – the 12-month benefit year beginning the Sunday prior to when the employee first takes leave. Employers will not have a choice. This will result in OFLA and OR PFML measuring forward and running concurrently for common leave types for employees eligible under both programs.

In preparation for that, employers have the option to change their OFLA calculation now to the 12-month benefit year beginning the Sunday prior to when the employee first takes leave. This will result in OFLA matching OR PFML so that they will run concurrently for common leave types when OR PFML benefits start on September 3, 2023. As of July 1, 2024, OFLA's definition will change, and employers will no longer be able to choose calculation methods.

SB 999 also generally states that if leave is taken under OFLA that also qualifies for leave under FMLA and/or leave under OR PFML, all three run concurrently. The measure forward method is an option under FMLA, but it starts on the first day of the employee's leave. Therefore, an employer could choose this method and all three leaves would then measure forward; although, the FMLA measurement would not begin "the Sunday prior to when the employee first takes leave," it is still the most consistent manner of measuring the three leaves together. If an employer doesn't already use a measure forward method under FMLA, it must give employees 60 days' notice if it is going to change the method.

While SB 999 was a good start, it does not solve all of the potential problems with concurrency between OFLA and OR PFML. Employee eligibility rules are different under each law so, even with the change, it may be possible for an employee to use all of their PFML, but still have OFLA benefits to use. For example, a relatively new employee could take 14 weeks of pregnancy leave under PFML (eligibility only requires earning $1,000 in the base or alternate base year) before she was ever eligible for OLFA (which requires working an average of 25 hours for 180 days). That same employee could then take 12 additional weeks when she became eligible for OFLA to care for her husband with a serious health condition, at least part of which could occur in the same 12-month period of time as her PFML leave. That is all about as easy to understand as Shakespeare's Richard III.

Employment protections: OR PFML and OFLA include job protections. OFLA required that employees be returned to a position within 20 miles of the original job site if nothing is available at the original site. SB 999 increases this range to 50 miles. SB 999 also requires that if there are multiple job openings, the employee must be placed at the site closest to the original job site. SB 999 also copies this language to OR PFML.

Senate Bill 913 was signed on July 13, 2023 and will go into effect around September 24.

Prior to SB 913 premium contributions were capped at $132,900. With SB 913, contributions will be capped at the annual social security wage limit, similar to other states.

SB 913 also allows the state to share information with claimants and employers/carriers/TPAs if the information is necessary for payment of benefits and/or the collection of contributions.

Finally, SB 913 deleted language that limited benefit payments to 100% of the employee's average weekly wage ("AWW"). Now, it is an option for employers to allow employees to use sick time, vacation leave, or other paid leave to earn over 100% of their AWW. The state's explanation for this decision is that an employee's AWW is based on the total wages earned during the first 4 of the last 5 quarters divided by 12. If an employee only worked one-half of the year their AWW could be really low. Therefore, this change allows employers to choose to allow employees to use accrued leave to supplement their weekly benefit amount.

Batch 7 Rules. Oregon has done its PFML rulemaking in batches. The public hearings for the rules in Batch 7 were held in June and the rules should be finalized in August – all 35 of the anticipated changes! That's almost the same number of Shakesperean plays! Batch 7 proposes to amend the Benefit rules including defining "consecutive leave," "intermittent leave," and "leave from work." Batch 7 provides examples of what it means to be on "leave from work" to qualify for benefits. There are small changes to the application rules and the rules on verifying a serious health condition. Batch 7 adds a benefit rule regarding filing weekly claims for intermittent leave or leave for more than one qualifying purpose and one new rule dedicated solely to benefits when leave is taken for more than one reason. There are also amendments to the employee notice requirements including delays in paying benefits if notice isn't provided. Batch 7 also adds a new rule for federal and state tax withholding.

Batch 7 amends and adds Contributions and Recovery rules. There is a new rule specifying that benefits paid under OR PFML are not considered "wages." There is an amendment to the withholding of employee contributions rule and examples that are meant to help with rounding errors. There is a new rule for how payments will be applied, including debts to the department. There are also amendments to the rules regarding the failure to file reports or pay contributions.

Finally, Batch 7 amends several of the Equivalent Plan rules. These amendments include allowing the department to seek additional information to determine eligibility; aligning the appeal deadlines with the state plan; and terminating and withdrawing equivalent plans.

This is just a sample of the changes that will be brought by the Batch 7 rules.

Batch 8 Rules. Batch 8 rulemaking amends and adds more rules regarding Benefits and adds new rules to address Confidentiality. These are temporary rules which will be valid for 180 days starting in August. The rules will then go through the public comment period and become permanent in or around January 2024.

Oregon is among the states that have recently included someone who is "like a family member" to the covered relationships for family leave. The Oregon statute includes someone related "by blood or affinity." The amendments to the Benefits rules include a new definition of "affinity" to assist in determining whether a sufficient relationship exists between the employee and the person they are going to care for while on leave. A definition and a whole new rule are added for "designated representative" as someone who can exchange and access information regarding the employee on leave. There is also a definition of "first year" to clarify bonding leave. The job protection rule is amended to be more specific about the location an employee can be placed in after returning from leave as discussed above in SB 913.

The new Confidentiality rules define confidentiality as it relates to the state PFMLI program, clarifies the responsibility of the Paid Leave Oregon staff to safeguard information and defines the conditions for disclosing information.

This is also just a summary of the rule changes in Batch 8.

We'll provide more information in August when the rules in Batch 7 and Batch 8 become effective. After all of this, we can then look forward to Batch 9 in the fall!

Reliance Matrix Can Help!

You don't want to interpret these legislative and regulatory changes any more than you want to interpret Shakespeare's plays. Reliance Matrix offers state leave administration services to help employers get through all of the confusing language and come out on the other side understanding their obligations. For more information, contact your Reliance Matrix account manager or send us a message to ping@matrixcos.com.

Reliance Matrix is a branding name. Reliance Standard Life Insurance Company (Home Office Schaumburg, IL) is licensed in all states (except New York), the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam. First Reliance Standard Life Insurance Company (Home Office New York, NY) is licensed in New York and Delaware. Standard Security Life Insurance Company of New York (Home Office New York, NY) is licensed in all states. Absence services are provided by Matrix Absence Management, Inc. (Home Office Phoenix, AZ).

Through its insurance and administrative services entities, Reliance Matrix offers integrated leave management services involving the FMLA, state-mandated paid family and medical leave and accommodation solutions. Product features and availability may vary by state. For more information, please contact your Reliance Matrix account manager, or reach us at ping@matrixcos.com.