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.
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).
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).
The total contribution rate in 2023 for Paid Leave Oregon is 1% of an employee's gross earnings each pay period. This contribution was 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.
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.
Employees who apply for Paid Leave Oregon and are approved can enjoy the following benefits:
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.
In order to qualify for benefits under Paid Leave Oregon, individuals must be taking leave for one of the following reasons:
Aside from being aware of the above information, there are a few other responsibilities and employer requirements under Paid Leave Oregon.
Employer requirements include:
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.
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.