Employers are faced with two significant law changes effective July 1, 2024. Are you ready?
First, Oregon Senate Bill 1515, signed into law March 20, 2024, revised the Oregon Family Leave Act (OFLA) to clarify the interplay between OFLA and Paid Leave Oregon (PLO) and eliminate much of the overlap between OFLA and PLO. Second, on April 23, 2024, the U.S. Department of Labor (DOL) increased the minimum weekly salary threshold for certain exempt employees from $684/week ($33,696/year) to $844/week ($43,888/year). The effective date of both these changes is July 1, 2024.
OFLA/PLO Revisions
The OFLA revisions significantly change the types of leave available in order to eliminate duplicate coverage for the same conditions under PLO, and to eliminate potential “leave stacking” issues. Beginning July 1st, OFLA will provide up to 12 weeks of protected unpaid family leave for ONLY these purposes:
- To care for a child of the employee who is suffering from an illness, injury or condition that requires home care, whether or not it is a “serious health condition;”
- Due to the closure of the child’s school because of a public health emergency; and
- For bereavement leave related to the death of a family member, up to two weeks per death to a maximum of four weeks per year. This counts towards the total 12 week entitlement.
OFLA will no longer provide leave for an employee’s own serious health conditions or to care for a family member (other than a child) with a serious health condition, or parental leave to bond with a new child. These leaves instead will be covered by PLO. Employers will also no longer be able to run OFLA concurrently with PLO.
From July 1, 2024, through December 31, 2024, only, OFLA will also provide an additional two weeks of unpaid leave “[t]o effectuate the legal process required for placement of a foster child or the adoption of a child.” Beginning January 1, 2025, however, this leave will be covered by PLO. In addition to any other leave available under OFLA or PLO, an employee can still take an additional 12 weeks of unpaid OFLA for disabling pregnancy or childbirth related illnesses, injuries, or conditions that prevents the employee from performing “any available job duties.”
The changes to PLO clarify that employers must allow an employee the option of using available accrued leave to supplement PLO benefits, so long as the total combined amount does not exceed full wage replacement. Employers can choose to enact a policy that allows employees to use their full accrued leave allotment in addition to PLO even if this results in more than full wage replacement, employers can also dictate the particular order in which accrued leave is to be used, subject to the terms of an employment agreement or CBA.
DOL Rule re: Salary Thresholds
As most employers are aware, for an employee to qualify as an exempt employee that is exempt from minimum wage and overtime requirements, the employee must meet both the salary and duties tests. Effective July 1, 2024, the DOL Rule increases the minimum salary threshold to qualify for the executive, administrative, or professional exemptions (also known as the “White Collar” exemptions) from $684/week ($33,696/year) to $844/week ($43,888/year). The DOL Rule also increases the threshold for highly compensated employees from $107,432/year to $132,964/year.
Perhaps more significantly, the July 1st increases are only initial increases. On January 1, 2025, the thresholds will increase to $1,128/week ($58,656/year) and $151,164 for highly compensated employees. On July 1, 2025, and every three years thereafter, the thresholds will be automatically adjusted based upon certain methodologies, including U.S. Census Bureau salary data, to reflect earnings growth. Employers should also bear in mind that the salary threshold represents only one part of the criteria necessary for exempt employees, and in order to be properly classified as exempt, employees must also meet the appropriate duties test.
So what now? Employers should immediately update Employee Handbooks to reflect the change in OFLA and PLO. In addition, employers should take a close look at compensation levels for exempt employees, and confirm that such employees will not only meet the new salary threshold, but are also performing duties that justify exempt status. Jordan Ramis is available to help with implementing these measures and to help ensure you are fully compliant.
Tags: Employment
