by Scott Herson-Hord, on Feb 13, 2023 10:45:00 AM
Paid Leave Oregon is the newest Oregon leave law, which took effect in 2023. It provides time off and financial support for employees to care for themselves or family members. The following article will provide Oregon employers with a guide on what they need to know regarding the new Oregon Paid Leave law.
Paid Leave Oregon Overview
Oregon's new Paid Leave law, formally referred to as Paid Leave Oregon, provides employees throughout the state in companies of any size with up to 12 weeks of paid time off. The time off is paid for by a newly created state-paid leave fund rather than the employer. However, employers still need to understand the responsibilities and requirements under the new paid leave program, as well as contribution rates and payroll requirements for the state-paid leave fund.
Important Note: Paid Leave Oregon runs in conjunction with the Oregon Sick Time Law and Oregon Family Leave Act (OFLA). Employers must adhere to all legislation required across these three sick leave laws to ensure compliance. On a federal level, employers may also need to comply with the federal Family Medical Leave Act (FMLA).
When Does Paid Leave Oregon Start?
Beginning January 1st, 2023, employees and employers are required to begin making contributions toward Paid Leave Oregon.
On September 3rd, 2023, employees can start applying for the benefits of the program. Employees who apply for and are approved for the program will be able to take time off from work for health and safety-related reasons while still receiving compensation through the state of Oregon (not the employer directly).
Paid Leave Oregon Payroll Tax Contribution Rates
The total contribution rate in 2023 for Paid Leave Oregon is 1% of an employee's gross earnings each pay period. This contribution is only required for up to $132,900 of an employee's wages for 2023. For 2024, contributions apply for up to $168,600 of wages.
The employee does NOT pay the total contribution rate. The contribution rate is split between the employee, and the employer OR the State of Oregon, which is dependent upon on the size of the business.
The employee contribution is 60% of the total contribution rate. In other words, 0.6% of an employee's gross earnings is deducted each pay period and remitted quarterly.
The employer is required to contribute the remaining 40% of the total contribution rate if they have 25 employees or more. Otherwise, the State of Oregon covers the remaining 40%.
No matter the size of the business, employers still need to set up payroll deductions to collect and remit the employee contributions quarterly to the Oregon Department of Revenue (DOR) AND report total employee counts and wages in Frances Online.
For help with collecting & remitting contributions and reporting for Paid Leave Oregon, find a company that provides Oregon payroll services and software.
Paid Leave Oregon Eligibility Requirements
In order for an employee to qualify for Paid Leave Oregon, the employee must have made at least $1,000 in the calendar year leading up to applying for Paid Leave Oregon Benefits. The employee may only take leave for one of the qualifying life events covered below.
Employees are able to apply for Oregon Paid Leave Benefits regardless of full-time, part-time, or seasonal status, and may have one or multiple jobs for different employers. Individuals who are self-employed as well as independent contractors are not automatically covered but can choose to be. More information on Paid Leave Oregon for self-employed workers can be found on the Paid Leave Oregon website.
Paid Leave Oregon Benefits
Employees who apply for Paid Leave Oregon and are approved can enjoy the following benefits:
- Up to 12 weeks off from work in a year. In some pregnancy-related situations, an employee may be able to take up to two more weeks for a total of 14 weeks.
- Leave may be taken in increments of weeks or days
- While on leave, the program Paid Leave Oregon pays employees up to 100% of wages. The weekly minimum amount is $61 and weekly maximum amount is $1,469.
- Job protection (includes position restoration) for those who've been employed for over 90 days
One additional benefit for the employer is that all compensation for leave taken under Paid Leave Oregon is paid and managed by the state directly, rather than the employer.
Qualifying Life Events for Paid Leave Oregon
In order to qualify for benefits under Paid Leave Oregon, individuals must be taking leave for one of the following reasons:
- The birth of a child
- Bonding with a child, only:
- During the first year after birth
- Through Adoption
- When they've been placed in your home through foster care
- To care for a family member with a serious illness or injury
- To care for yourself when you have a serious illness or injury
- When the need for leave is in relation to a survivor (employee or family member) of sexual assault, domestic violence, harassment, or stalking
Paid Leave Oregon Requirements for Employers
Aside from being aware of the above information, there are a few other responsibilities and employer requirements under Paid Leave Oregon.
Employer requirements include:
- Posting a notice that tells your employees about Paid Leave Oregon through the Model Notice or an all-in-one Oregon Labor Law Poster
- This should include the employee's rights, how to file a claim, and rights to job protection
- Allowing employees to take time off if approved through Paid Leave Oregon
- Giving employees back their job upon returning from leave (job protection)
- Only applies if the employee has worked for the employer for at least 90 days
- Submitting employer contributions
- Businesses with 25+ employees only
- Collecting and submitting employee contributions to the state
- Reporting total employee numbers and total contributions to the state
Important Note: Employers who offer an equivalent plan that offers benefits equal to or greater than the benefits Paid Leave Oregon provides may apply for approval of equivalent plan status, which - if approved - would not require the employer or employees to also participate in Paid Leave Oregon.
Get Help Managing Paid Leave Oregon
Compliance challenges with Paid Leave Oregon can be easily overcome with the help of a payroll service company coupled with a leave management solution. And when it comes to contributions specifically, cloud-based payroll solutions can help make things especially easier.
For help complying with Paid Leave Oregon, contact an Oregon Payroll Provider today.
Guest Author: Scott Herson-Hord
Scott Herson-Hord is the CEO of Great Northern Staff Administrators (GNSA), an Oregon payroll and HR services company that specializes in serving small to mid-size businesses with administrative solutions to streamline back-office processes from benefits to human resources. Starting his career in finance and working more than 10 years as a controller for various companies, Scott leveraged this experience over the next 22 years with GNSA to become one of the pacific northwest’s foremost experts in human capital management (HCM).