Paid Leave Oregon - The Complete Guide for 2026

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 regarding the Oregon Paid Leave law.

Paid Leave Oregon Overview 

Oregon's 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: As of July 1, 2024, Paid Leave Oregon no longer 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 Did Paid Leave Oregon Start?

Effective January 1st, 2023, employees and employers were required to begin making contributions toward Paid Leave Oregon.

On September 3rd, 2023, employees could 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 2025 for Paid Leave Oregon is 1% of an employee's gross earnings each pay period. This contribution is only required for up to $176,000 of an employee's 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 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
  • Leave may be taken in increments of weeks or days
  • In some pregnancy-related situations, an employee may be able to take up to two more weeks for a total of 14 weeks.
• While on leave, the program Paid Leave Oregon pays employees up to 100% of the state's average weekly wage
  • The weekly minimum amount is $68.19, and the weekly maximum amount is $1,636.56. 
• 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.

“Top-up” PLO Benefits with Paid Time Off (PTO)

Changes made to Paid Leave Oregon on July 1, 2024, include a provision that clarifies employees’ ability to “top-up” Paid Leave Oregon benefits with paid time off. 

For employees who make a certain amount, Paid Leave Oregon does not completely replace wages; however, employees may use either accrued paid sick leave, vacation leave, or any other offered PTO to “top up” their Paid Leave Oregon benefits. If an employee chooses to “top up” Paid Leave Oregon benefits, the benefits may only be topped up to 100% of the employee’s wages.

If employees have more than one type of PTO available, the employer can decide the order in which the employee uses each type of PTO. This can mean an employer could decide for an employee to use vacation leave first before being able to use sick leave.

Exemptions from Garnishment

Paid Leave Oregon benefits will be exempt from most forms of garnishment, including child or spousal support garnishments and restitution for crime victims.

Paid Leave Oregon and the Oregon Family Leave Act (OFLA)

Effective July 1, 2024, significant changes have been made to Paid Leave Oregon (PLO) and Oregon Family Leave Act (OFLA) to remove conflicting rules and inconsistencies.

Changes have been established to prevent employees from stacking various types of leave, which could add up to 36 weeks of OFLA leave.

The updates made to Paid Leave Oregon and OFLA prevent the two from running concurrently with one another. This will allow Paid Leave Oregon and OFLA to overlap, but Paid Leave Oregon no longer covers qualifying events such as sick child leave, military family leave, or bereavement leave.

Qualifying Life Events for Paid Leave Oregon

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 the child has been placed in your home through foster care
• Completing necessary tasks regarding adopting a child or having a foster care child join the employee’s home
• 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
• Save leave to care for themselves or a dependent child that are survivor of sexual assault, domestic violence, harassment, bias crime, 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 his or her jobs upon returning from leave (job protection)
  • This 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.  

Request for Fitness-for-Duty Update 2025

Effective September 26, 2025, employers are allowed to require a fitness-for-duty certification under FMLA before restoring an employee’s position after he or she has been on medical leave under Paid Leave Oregon. Employers can only require a fitness-for-duty certification if the requirement is uniformly applied to all members of the workforce, as stated in a company policy or employee handbook.

It’s important to note that requiring a fitness-for-duty certification generally only applies to job-related activities that are consistent with the business’s needs. If the employee takes leave entirely covered by OFLA, FMLA, or Paid Leave Oregon, employers can exercise the right to require a fitness-for-duty certification.

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).