In a rare move, the Oregon and Washington state agencies that oversee each state’s paid family and medical leave programs have issued joint guidance on how to make the employer contribution for family leave when more than one state is involved.
Legal experts have noted that the guidance makes clear that employers only have to pay into one state system for the same employee even if the employee splits their duties between Oregon and Washington.
The Oregon Employment Department and the Washington Employment Security Department said they have received “several questions on how to report employees for their respective state paid leave programs.”
The COVID-19 pandemic and a red-hot housing market combined to accelerate the trend for employees to work remotely, even moving to nearby states. Workers residing out of state or working across state lines in the 2 neighboring states has led to uncertainty over whether the workers are eligible for paid leave in Oregon or in Washington.
Sharpening the urgency, Oregon’s paid leave program gets off the ground in 2023. Employers must start collecting funds for the benefit in January 2023. Washington’s paid leave program is already in effect.
The analysis: Factors that employers need to consider
Employers should consider several factors on a sequential basis:
- The employee’s physical location
- The base of operations
- State that provides direction and control
- The employee’s residence
Physical location. First, the physical location where the work is performed is considered first, according to the guidance. If all of the work is performed in one state, then all of the worker’s wages should be reported to that state, the officials said.
Base of operations. Second, if the work is performed on a regular basis in multiple states, then the state that is the “base of operations” is the state that should be used for reporting the employee’s wages.
Direction and control. Third, if there is no “base of operations,” and the work is performed on a regular basis in multiple states, then the state that provides “direction and control” is the state that should be used for reporting employees’ wages.
Employee residence. Finally, where does the employee reside? If work is performed on a regular basis in several states and direction and control does not come from a state in which the employee works, then the state in which the employee lives controls.
Suggestions for actions that employers can take
Attorneys at Ogletree, Deakins, Nash & Stewart, P.C. have offered several suggestions for actions that employers can take:
- Update employee information, including state of residence. “Many employees may have relocated but have not informed their employers,” they said in a blog post.
- Employers that operate in both states and whose employees form work in both states should consider designating a site as the base of operations.
- Inform employees about which state will receive the paid leave program contributions. “This will avoid employee confusion when employees apply for Oregon or Washington paid leave benefits,” the attorneys said.
What are Oregon’s paid leave guidelines for employers?
Oregon employers must begin collecting and making payroll contributions on Jan. 1, 2023. Eligible workers can’t apply for benefits until September 2023. The start date of the benefit was rolled back from the original implementation date.
The measure provides 12 weeks of job-protected, paid leave annually for all Oregon workers who make more than $1,000 a year. However, some pregnancy-related situations allow 14 weeks of leave.
Employers with 1 or more employees working in the state, except for the federal government, must comply. Freelancers and tribal governments can also sign up for leave.
However, while Beaver State employees can take advantage of the paid leave benefit, only certain employers must contribute. Employers with 25 or more workers must pay into the trust unless they have a paid leave program that offers the same or more generous benefits.
Smaller employers, however, must collect employee contributions.
The leave covers:
- Medical leave — An employee can take leave for their serious health condition
- Family leave — An employee can take leave for the care of a family member who has a serious illness or injury or to bond with a new child after birth, adoption, or foster care placement
- Safe leave — To handle domestic violence, harassment, sexual assault, or stalking matters
Oregon has a paid sick leave program that is separate from the paid family leave benefit. Sick leave was expanded in early 2022 to include public health emergencies, emergency evacuation orders, and air quality and heat index issues.
What are Washington’s paid leave guidelines for employers?
Washington’s paid family and medical leave law went into effect in January 2020. Eligible workers in the Evergreen state can take up to 12 weeks of paid leave for medical and family reasons.
An additional 4 weeks (16 weeks) is available under certain circumstances as well as 2 additional weeks (18 weeks) if certain pregnancy complications occur.
All Washington employers, including out-of-state employers with Washington employees, must comply.
All Washington employers, including out-of-state employers with Washington employees, must comply. However, freelancers, federal employees, federally recognized tribes, and employees who are covered by a collective bargaining agreement do not have to comply with the requirement.
The Washington paid leave requirement is job-protected for employers with 50 or more employees.
Washington also has a mandatory paid sick leave law which went into effect in January 2018. Employees earn 1 hour of paid sick leave for every 40 hours worked.
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Paid leave continues to expand in 2022
There is no federal law that mandates that private employers provide paid family and medical leave. The federal Family and Medical Leave Act provides 12 weeks of leave for employers with 50 or more employees. Leave under the FMLA is job-protected but it is unpaid.
President Donald Trump approved paid parental leave for federal employees in December 2019. The measure was part of a defense spending bill. It went into effect October 2020.
In spite of the federal action, the trend toward paid leave has been occurring at the local and state levels. Several jurisdictions have approved paid leave laws in 2022, including:
- San Francisco — Bay Area voters approved leave for public health emergencies earlier this year. San Francisco employers must provide up 40 hours of leave in 2022. They must also provide up to 80 hours of leave in 2023 if officials declare a public health emergency. The new leave requirement is in addition to the paid sick leave that was already on the books.
- Delaware — Eligible workers in the Blue Hen State will be able to take 12 weeks of job-protected medical and family leave starting January 2026. Smaller employers — those with 10 or fewer employees — do not have to comply.
- Maryland — Maryland lawmakers overrode a gubernatorial veto to make paid family and medical leave a reality for Marylanders. Workers will get up to 12 weeks of partially paid leave starting in 2025 for a worker’s “serious health condition” or to allow an employee to care for a family member. Employers with one or more employees will have to provide the state-required leave.
- Connecticut — One of the most generous leave laws for employees went into effect in January 2022. Constitution State workers can take up to 12 weeks of paid leave in 12 months for personal and family health needs.
Employers should periodically check local and state laws
Leave management isn’t getting any easier for employers. Leave laws are changing at a dizzying rate. Employers should periodically check the local and state laws of the jurisdictions in which they operate. That will enable them to find out important changes to workers’ rights to take time off.