Paid Leave and Employment Status During the COVID-19 Pandemic Public Health Emergency
Frequently Asked Questions for PERS Employer Reporters
1. Question: If an employee uses their own accrued paid leave (vacation, sick, or personal business) or donated paid leave for an absence relating to the COVID-19 public health emergency, should employers report the payment as subject salary?
Answer: Yes. Paid leave that is taken under COVID-19 public health emergency may be reported to PERS like other types of paid leave (salary plus hours).
2. Question: If an employer provides new paid leave for an absence relating to the COVID-19 public health emergency, or allows employees to accrue additional paid sick leave or paid family leave that is in addition to the employee’s existing paid leave, should employers report the payment as subject salary?
Answer: Generally, yes. Paid leave that is taken under COVID-19 public health emergency may be reported to PERS like other types of paid leave (salary plus hours).
3. Question: If an employee uses paid leave relating to the COVID-19 public health emergency from 4/1/2020 through 12/31/2020 that the employer is required to provide under the federal law "Families First Coronavirus Response Act" (H.R. 6201)1, should employers report the payment as subject salary?
Answer: Generally, yes. Paid sick leave, or paid family leave, taken under federal law may be reported to PERS like other types of paid leave (salary plus hours). Once qualifying paid leave is granted, it does not matter whether the paid leave is required by state or federal laws or made pursuant to employment agreements.
If an employer
participates in the PERS unused sick leave program under ORS 238.350, which
allows accumulated sick leave to be included in a Tier One or Tier Two member’s
final average salary determination, does the employer have to report the sick
leave hours a Tier One/Tier Two employee uses for emergency paid sick leave
related to the COVID-19 pandemic under the Families First Coronavirus Recovery
Act to PERS, or are they considered separate from regular sick leave hours?
Yes, the hours
used for emergency paid sick leave related to COVID-19 should be reported to
PERS as regular used sick leave hours. There is no special rule that changes
the employer’s requirement to deduct the used sick leave hours from inclusion
in the PERS unused sick leave program. When these hours are used, they do not
qualify for use in the unused sick leave program.
the COVID-19 public health emergency, if the employer’s rate of sick-leave
accrual for its employees exceeds the maximum rate of accrual allowed by PERS
(8 hours per month or the lowest rate of accrual in effect for an eligible employee),
is it possible to convert any excess sick leave hours not already reported to
PERS to another type of leave without impacting a Tier One/Tier Two employee’s
unused sick leave hours as reported to PERS?
An employer’s written policy may allow employees to convert excess sick leave
hours to another type of paid leave, such as paid time off or vacation leave.
If those other paid leave hours are used during the pandemic, the use of those
paid leave hours would not impact sick leave usage for the PERS unused sick
leave program. However, please note that conversions can be complicated and can
have unintended consequences. Once paid leave is assigned a classification,
such as sick leave, PTO, or vacation, then certain rules impact how that leave
can be treated in other situations, such as payouts.
6. Question: Are wages that include paid sick leave and paid family leave subject salary for all plans?
Answer: Generally, yes. Wages, or salary, are remuneration
made to an employee for services rendered as an employee for an employer. Subject salary includes payments for sick leave or family leave that are required by state or federal laws or made pursuant to employment agreements.
7. Question: How does reported paid leave impact eligibility?
Answer: If salary and hours are reported, then paid leave would count toward the employee’s membership eligibility, creditable service, contributions, and final average salary.
8. Question: If I am temporarily laying off my employee, how should I report this to PERS?
Answer: If an employee is temporarily laid off, they should be reported to PERS as terminated as of the date of the layoff. When they are later rehired, they should be reported to PERS as hired as of the date they restart employment.
During the period of non-employment, a laid-off employee will not accrue PERS benefits as a non-employee.
9. Question: If I decide to not lay off my employee, but I do not have work for them to perform and do not pay them during this period of time (i.e., unpaid furlough), how should I report this to PERS?
Answer: This is an employer determination that depends on the facts. The threshold requirement for PERS membership qualification requires that the person be an employee.
If the person is not laid off or terminated, then they are considered an employee. As an employee, they may receive some employee benefits even though they are not actually performing services or receiving pay.
In general, if the person has no wages or hours but is still an employee, there is nothing you have to report or change in your reporting. However, if the person is on unpaid furlough that will last 11 business days or more, the period of absence should be reported as an official leave of absence without pay (LWOP) to PERS, unless otherwise specified by the employee’s collective bargaining agreement or employment agreement. Contact your Employer Service Center representative if you have additional questions.
10. Question: If I temporarily lay off my employee, can I report the period of layoff as “leave without pay” to PERS?
Answer: No. A layoff from employment is not a leave without pay. See Oregon Administrative Rule 459-010-0010, subsection (7).
11. Question: When and how can I report an official period of leave without pay to PERS?
Answer: When an employer grants an employee leave without pay, it may be reported to PERS as provided in Oregon Administrative Rule 459-010-0010. An official leave of absence must be supported by a written agreement between the employer and the employee that confirms compliance with any applicable law, rules, and regulations. The agreement must specify the duration of the period of leave of absence without pay and be certified by the employer granting such leave.
12. Question: If I am participating in the Oregon Employment Department’s Work Share program, how should I report the reduced or furlough hours to PERS?
Answer: An employer participating in the Work Share program should treat the reduced or furlough hours as “leave without pay” (no salary or hours) because those Work Share program benefits are not considered salary for PERS purposes. Please note that a 20-40% reduction of a full-time employee’s weekly hours under the Work Share program still allows the employee to work the major fraction of the month. As long as the employee works and is paid for at least 50 hours each month, the reduction in work hours due to Work Share program furlough should not reduce the member’s creditable service. However, salary would be reduced for those months with Work Share program furlough, with an impact to IAP contributions and a possible impact to final average salary. If you have additional eligibility questions about the Work Share program, please visit the Oregon Employment Department’s website, which contains additional frequently asked questions.
13. Question: As the Social Security administrator for the State, does PERS have any definitive guidance on whether local governments are or are not eligible for the Social Security tax credit on the employer’s share?
Answer: No. Because of the rapidly evolving environment relating to COVID-19, PERS cannot provide definitive guidance on the newly passed Families First Coronavirus Response Act at this time. However, the IRS has provided some preliminary guidance on this topic that seems to indicate that governmental employers are not eligible for the Social Security tax credit on their payroll taxes. For additional
information on the federal law, please review the following sets of FAQs:
FAQs from the IRS:
COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs
FAQs from the U.S. Department of Labor, Wage, and Hour Division:
DOL Families First Coronavirus Response Act: Questions and Answers
This FAQ is not meant to be comprehensive and information is subject to change. PERS will add and update information when we have more to share. Please contact your Employer Service Center representative if you have additional questions. Thank
you for your patience and understanding.
1Specifically, the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act of the Families First Coronavirus Response Act passed under H.R. 6201.