If you attended our most recent Quarterly Compliance Update, Oregon (and to be fair, other states) has everyone running around with their PFML hair on fire.

Since our last blog regarding Oregon PFML, a lot has happened:

Thirty-five (35) rule changes (yes 35!) in Batch 7 of the Oregon Administrative Rules interpreting the Paid Leave Oregon statutes became effective;
The temporary emergency Batch 8 rules became effective;
Paid Leave Oregon went live on September 3, 2023;
Several PFML senate bills became effective; and
Batch 9 of the Oregon Administrative rules are posted, hearings scheduled, and Batch 9b is on the horizon.

It seems like ever since the COVID-19 pandemic we keep hearing the phrase, "building the plane while we're flying it." That is aptly true for Oregon's PFML program, and we are providing the following deep dive into the instruction manual for building this plane.

The set of Oregon Administrative Rules known as the Batch 7 rules became effective 8/1/23. Some of the highlights include:

Leave from Work. Rule 471-070-1010 added a requirement that employees must be currently scheduled to work to receive PFML benefits. New Rule 471-070-1015 requires that employees be scheduled to work and unable to perform their duties because of a PFML qualifying reason. An employee is not considered to be taking leave from work if they wouldn't normally be performing their work duties because of a lapse in seasonal operations, or other suspensions of business operations; school break periods; or because they are incarcerated.
Employee Notice to Employers. Except for safe leave, amended Rule 471-070-1310, requires that employees "give notice to employers when commencing a period of leave." For foreseeable leave, an employee must give verbal notice 30 calendar days before starting leave and an employer may require employees to give written notice at least 30 calendar days before starting leave. Employees must still give employers reasonable notice of safe leave unless advance notice is not feasible.
- Notice for consecutive leave must only be given to the employer once before taking the leave.
- Notice for intermittent leave must be given verbally within 24 hours of the start of each workday taken or earlier if known.
- If the employer requires employees to provide written notice of leave, the policy and procedures must include that and a description of the benefit reduction, in an amount as permitted by the rules, that may be imposed for not complying with the notice requirement.
Simultaneous Qualifying Purposes. Oregon added Rule 471-070-1430 to allow PFML to be taken for more than one qualifying purpose during the same week if the employee submits separate and complete applications for each. The multiple qualifying reasons can be for the same type of qualifying purposes (e.g. care of 2 different family members), but only one benefit payment can be received per day.
Federal and State Voluntary Tax Withholding. New rule 417-070-1480 provides that employees can elect to have federal and/or state personal income tax withheld from their benefits. Federal income tax will be withheld at 10% and Oregon state income tax at 8%.
Appeals and Dispute Resolution. Rule 471-070-2220 extended employees' time to appeal a benefit denial from 20 days to 60 calendar days from a written denial or as soon as practicable, if there is good cause. Similarly, Rule 471-070-2400 increased the time for employees to request dispute assistance from 20 days to 60 calendar days or as soon as practicable.

The Batch 8 temporary rule amendments became effective 8/9/23. These rules were temporary emergency rules so they could become effective before the program went live. They are to be made permanent in Batch 9. The highlights include:

Affinity relationship. The definition of "Affinity" in Rule 471-070-1000 now examines the relationship under the totality of the circumstances using six factors without any one factor being determinative. Those factors include sharing personal finances, being an emergency contact, cohabitation and its duration and purpose, the expectation to provide care, geographical proximity, and any other factors demonstrating a family-like relationship.
"Claimant Designated Representative". A definition of "Claimant Designated Representative" was added as an individual, 18 years or old who is authorized by the claimant to exchange information with the PFML program. Then, Rule 471-070-1250 was added to allow that once the claimant completes and submits the designated representative form, the designated representative can exchange information with the PFML program on behalf of the claimant.
Definition of "Health Care Provider". Changes to Rule 471-070-1000 clarify that a Health Care Provider must be a person,other than a claimant or a person for whom a claimant is providing care.
Job protection. Amendments to Rule 471-070-1330 include that if an equivalent position is available at multiple job sites, and the employee is not able to return to the employee's former positionbecause it no longer exists, the employer shall first offer the employee the position at the job site closest to the employee's former job site.

The Batch 9 rule amendments are scheduled for public hearings on November 16^th and 20^th. As stated above, Batch 9 will make the rules in Batch 8 final.

Batch 9 also adds "bias crimes" as a type of safe leave.
There are a few minor changes to Rule 471-070-2400 regarding disputes between an equivalent plan employer and employee and to Rule 471-070-8010 regarding appeal assignments to the Office of Administrative Hearings.
There are some small changes to the reporting rules for Equivalent Plans in Rules 471-070-2200 and 471-070-2230.
Batch 9 also added temporary rule changes for OAR 471-070-2030 Self-employed: Income, Contribution Payments, and Reporting Requirements which will require a Batch 9b to make final.

Our last blog referred to several senate bills bringing changes to OR PFML, those changes are now effective.

Senate Bill 912 became effective on 9/3/23. That bill brought additional sections to the PFML law for benefits paid in error through no fault of the recipient, waiving recovery of overpaid benefits, ineligibility for benefits after a fraud conviction in obtaining benefits, cancelling unrecoverable benefits, and offsetting monies owed by and to a debtor. This bill also added a section that provides for penalties to private plan employers that violate the PFML law ORS 657B.210‒$1000 for the first violation and $2000 second violation.

Senate Bill 912 added language to ORS 657B.120 regarding deducting for overpayment of benefits due to willfully false statements and bringing civil actions for the same. Employers and employees owing moneys under the program were added to ORS 657B.280 which allows liens for delinquent contributions and improper benefit payments. ORS 657B.410 now includes employer appeals for penalty assessments and other determinations.

Senate Bill 913 also had several sections that became effective on 9/3/23. One of the most important amendments changed language in 657B.210 and 657B.030 so that employers now have the choice to allow employees to top off PFML benefits and earn more than 100% of their average weekly wage (see our prior blog). We have since learned from Paid Leave Oregon that this amendment could result in employees receiving more than the maximum weekly benefit amount (currently $1,523.63). ORS 657B.400 contains significant amendments regarding what information can be shared by Paid Leave Oregon.

Senate Bill 913 also added a section to the law allowing the state to dismiss requests or applications for appeal hearings requested on or after 1/1/23. SB 913 amended ORS 657B.150 limiting the maximum contributions after 1/1/24 to the annual social security wage limit. The localization language in ORS 657B.175 was also amended.

We talked about the alignment between OR PFML and OFLA brought by SB 999 in our last blog. Since then, Paid Leave Oregon has held many webinars that included this issue. As we alluded to in the blog and our Quarterly Compliance Updates, the bottom line is that it is possible for there to be stacking of these leaves, despite SB 999. Paid Leave Oregon clarified that if an employee files for OR PFML, OFLA runs concurrently. However, if an employee files for OFLA, the employer cannot force the employee to file for OR PFML. Therefore, the leaves can be stacked. Paid Leave Oregon and BOLI posted a joint Guidance on concurrency, and BOLI held a webinar with materials. We have heard there is a possibility the legislature will take this issue up again because the intent was that the leaves run concurrently.

The above are the written instructions for building the OR PFML plane, but there are also instructions that we have learned from asking questions of and talking to Paid Leave Oregon.

In-flight Claims. Currently, the rules provide that if an employer moves from an equivalent plan to the state plan, the private plan carrier/administrator is responsible for running out the pending claims. The state did not, however, draft a similar rule for when an employer moves from the state plan to an equivalent plan. We have learned that the state's system is not programmed to run out in-flight claims. Therefore, when an employer moves from the state plan to an equivalent plan, in-flight claims will become the responsibility of the carrier/administrator of the equivalent plan.

Additional 2 weeks of pregnancy leave. OR PFML allows for an additional 2 weeks of leave for limitations related to pregnancy, childbirth, or a related medical condition (including lactation). Paid Leave Oregon has made it clear that entitlement to this leave is broad and a "limitation" does not require a "complication." We have learned from Paid Leave Oregon that if the employee/birthing parent requests the additional 2 weeks of leave on the certification form, the state is applying that "bank" of time at the beginning of the leave. The state is treating that leave as medical leave for tax purposes, not bonding leave. If an employee doesn't request the 2 weeks initially, the employee can request it later. Also, pregnancies that occurred prior to the September 3 start of the program are entitled to this 2 weeks of leave, but it must be taken within 12 months of the birth.

STD offsets. Paid Leave Oregon let us know that they are receiving a lot of questions about OR PFML benefits and STD offsets to those benefits. Employees are contacting the state requesting a letter denying their PFML benefits because they do not want to apply for or receive PFML benefits; they only want to receive STD benefits. Employees are reporting that employers are telling employees they must apply for OR PFML. Unlike FMLA, employees cannot be forced to apply for PFML, but that does not remove the offset. STD policy language states that the offset is for PFML benefits received or that the employee is entitled to receive even if the employee does not apply. This is a concept that should be explained to employees along with the guidance that it is in an employee's best interest to apply for OR PFML because then the leave is job protected.

Retroactive pay increases. The State confirmed that it would not recalculate PFML benefits based on the following example: the employee's average weekly wage is $1000, the employee files for benefits beginning 9/3/23, the employee receives a retroactive wage increase of $1200 dating back to 6/1/23. Based on the definition of average weekly wage and earnings being what the employee actually received in pay during the base period, there would be no recalculation of benefit amount.

Reporting. We received clarification from Paid Leave Oregon that equivalent plan reporting will not be due until 1/31/25. Whether an equivalent plan became effective 9/3/23 or 10/1/24, on 1/31/25 reporting will need to occur for all of the months the equivalent plan was effective. These clarifications are expected to be in the Batch 9(b) rules.

Reliance Matrix Can Help!

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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 AbsenceMentor@rsli.com.