by Kirsten Solis
In most industries, some sort of leave policy is a benefit package standard. Usually, employees accrue PTO based on the amount of time they’ve worked and also have the option to take unpaid leave when the need occurs.
However, that doesn’t make it easy to actually take the leave they need. The key word here is “unpaid.” Employees often forfeit their ability to take leave during big life events just to avoid losing income.
Some states like Oregon are addressing the issue by creating state-mandated paid leave policies. While it’s clearly a life-changing prospect for employees, these new policies do create new challenges for employers.
If you’re an employer or leader in your company, the content below will help you ask the right questions and wrap your mind around a response to the changes at hand related to state-mandated paid leave.
How do these policies work?
Starting on September 3rd, 2023 the Oregon Paid Family Medical Leave, or PLO, policy will go into effect. Any employee who’s earned $1,000 or more in Oregon state wages over the previous year will then be eligible for up to 12 weeks of paid leave in a 52-week period. (14 weeks for pregnancy-related leave.)
The application process is similar to unemployment programs. Paid leave needs to be filed for and can either be done through the state or procured through an employers carrier for what’s known as an equivalent plan. Whichever route a company chooses to go, all organizations in Oregon must be in compliance.
When opting in through the state, large employers must pay a total of 1% tax on employees’ salaries (40% from the employer and 60% from the employee). Companies with 25 or less employees are exempt from this tax.
Oregon Paid Family Medical Leave is quite possibly the most robust policy in the country. Paid time off can be taken in the event of the birth or adoption of a child or health issues for oneself or their family. Leave is also available for survivors of sexual assault, harassment or stalking.
Not only can you receive up to 12 weeks of leave, this policy prevents retaliation from an employer. It ensures job protection for anyone who takes leave and has been employed for at least 90 days.
What concerns does mandated paid leave create for employers?
Policies like this are great for employees who’ve historically had to choose between financial security and taking the time they need during major life events.
However, for employers, they open up a new category of logistics to grapple with.
1. The Financial Burden
While 1% might seem like a small figure on paper, it certainly adds up when we’re talking about 1% of the yearly salaries of more than 25 employees.
ACTION ITEM #1: Employers need to take a critical look at their overall budgets and plan ahead for this new tax. In most cases, making some cutbacks will be necessary to make room for the expense
2. Widespread Eligibility
Because the only requirement to earning PLO is having earning a minimum of $1,000 in the previous year, almost anyone is eligible.
Previously, earning some type of leave would require an amount of time spent at one’s current job before you’d be able to take it. But with this new policy, there’s a chance you could hire a new employee who takes leave immediately after you’ve spent time and resources training them.
ACTION ITEM #2: Cross-training of staff is going to be a critical strategy for small to mid-sized businesses. More than ever, companies shouldn’t rely on single points of failure when it comes to tasks managing task.
3. Staffing Challenges
Since paid leave will now be widely available in Oregon, more employees will be apt to take it.
With more employees taking time away, employers will need a plan in place for when they find themselves short staffed.
ACTION ITEM #3: You’ll want to build a strategy for covering employees on leave. Flexible staffing solutions like temp agencies or utilizing on call staff can help mitigate a shortage. However, it’s also a great idea to cross train your team to be able to cover any shortages.
4. Administrative Challenges
Perhaps the biggest hurdle employers face is understanding the complexity of these laws and how they interact with each other. Ultimately, you’ll need to know how comply with the laws and provide employees with the tools they need to use their paid leave.
With so many different types of leave available, it’s crucial that companies are able to track employee utilization. While some types of leave need to used concurrently, other types of leave can be stacked to provide employees with more time off.
For example, after a year of employment, employees would be eligible for 3 types of protected leave:
Oregon Family Medical Leave or OFLA which provides up to 12 weeks of unpaid leave
Federal Family Medical Leave or FMLA which provides up to 12 weeks of unpaid leave
Oregon Paid Family Leave or PLO which provides up to 12-14 weeks of paid leave
The paperwork applying for all of these types of leaves would need to be filed together to ensure that these leaves are being used up concurrently. Otherwise, your employee could take multiple leaves consecutively, resulting in up to 24 weeks or more of leave being taken.
ACTION ITEM #4: Establish a solid system for tracking employee leave requests.
Partner with the experts to master paid leave.
Oregon’s new policy hasn’t even gone into effect yet, but employers are already working feverishly to understand the ins and outs of this policy and how their companies will be affected.
Xenium’s team partners with yours to develop an effective strategy for responding to the changes, and we help you navigate the red tape and master the human touch along the way.
Moments of mandated change like this are opportunities to prove your commitment to building a positive workplace culture to your employees. The time and resources you spend doing so always pay off in increased loyalty and productivity from your team.
Schedule a call here to learn how Xenium’s Complete HR + Payroll service provides the support you need when big changes like mandated paid leave come along!