Sick Leave and Minimum Wage Update: Oregon, Vermont, Santa Monica
On Wednesday, Oregon Governor Kate Brown signed into law legislation that increases that state’s minimum wage from $9.25 to up to $14.75 by 2022, the highest of any state. The first increases go into effect on July 1, 2016. Under SB 1532 [PDF], minimum wage rates vary based upon the employer’s location, as set forth in the table below. Beginning in 2023, the rate will be indexed to inflation. The Commissioner of the Bureau of Labor and Industries has been charged with adopting rules for determining an employer’s location.
In addition, Santa Monica, California quietly passed a law raising the minimum wage and mandating paid sick leave starting July 1, 2016, adding to the regulatory maze for employers with employees in California. As currently written, Santa Monica’s sick leave law tracks San Francisco’s (arguably the most generous sick leave law in the nation), in that it does not contain an annual accrual or use cap. Instead, employees are allowed to accrue paid sick leave at the rate of one hour for every 30 hours worked, up to 40 hours (if the employer has 1-25 employees in Santa Monica) or 72 hours (if the employer has 26 or more employees in Santa Monica). If the employee reaches that cap, then uses some sick leave, the employee begins accruing leave again, up to that cap. In addition, employees are entitled to roll over all accrued, unused sick leave to the next year. As with the San Francisco ordinance, this creates difficulties for employers who wish to front-load a predetermined amount of sick leave (a practice that is permissible under California and many other sick leave laws). Of note, the City has established a working group to review and recommend technical adjustments to the adopted ordinance. The sick leave law goes into effect on July 1, 2016.
The Santa Monica law also establishes a minimum wage for employees who work at least two hours per week in Santa Monica. Large employers—those with 26 or more employees in Santa Monica—must pay a minimum wage of $10.50/hour beginning on July 1, 2016, increasing annually to $15.00/hour on July 1, 2020. Small employers—those with 25 or fewer employees in Santa Monica—must pay a minimum wage of $10.50/hour beginning on July 1, 2017, increasing annually $15.00/hour on July 1, 2021. Beginning July 1, 2022, and each year thereafter, the minimum wage will increase based on Consumer Price Index (CPI). The working group is also reviewing the minimum wage portion of the law.
Finally, Vermont is on the verge of becoming the fifth state (following California, Connecticut, Massachusetts and Oregon) to require private employers to provide paid sick leave for employees. All that is left is for Governor Shumlin to sign the legislation [PDF], which he is expected to do. Vermont’s sick leave law differs somewhat from laws in other jurisdictions in that 1) it only requires paid sick leave for employees who work an average of at least 18 hours/week, 2) employees accrue sick leave at a rate of one hour for every 52 worked (one hour for every 30 worked is the most common rate of accrual) and 3) it allows employees to use leave to accompany a parent, grandparent, spouse or parent-in-law to long-term care related appointments.
In addition, the law has a stepped approach for implementation. First, for small employers (those with 5 or fewer employees) the law does not go into effect until January 1, 2018; the effective date for all other employers is January 1, 2017. Second, through December 31, 2018, employees may only accrue and use up to 24 hours of paid sick leave per year; beginning January 1, 2019, that amount increases to 40 hours per year.
© Copyright 2016 Squire Patton Boggs (US) LLP