Oregon Sick Time Law: The Complete Guide for 2026

Oregon's Paid Sick Time Law under Senate Bill 454 first went into effect on January 1, 2016, making Oregon the fourth state to enact mandatory paid sick time. Updates to the paid sick time law were then made in 2018, largely to clarify the annual sick time limits and pay rates for certain types of employees. In 2021, 2025 and 2026 paid sick time coverage was expanded again to include additional events.

Every employer in the state is subject to the Oregon Paid Sick Time Law, which is why having a sick time policy in place is so important. This helps organizations stay in compliance with labor laws throughout the state, while also putting protections in place for the company and its employees. 

Leveraging an Oregon payroll & HR service company can help companies establish policies, processes, and software to manage and track sick time and stay compliant with legislation.

Businesses should also consider modernizing timekeeping processes and learn more about time and attendance software to better manage compliance with Oregon Sick Time and more.

This article can be used as a resource to guide employers through Oregon Sick Time Laws, providing the information and tools necessary to help with the following:

• Optimizing a company's sick leave policy
• Engaging employees
• Supporting managers
• Reducing risk of non-compliance issues or lawsuits
• Effectively managing everything sick time, including:
  • Eligibility
  • Accrual rates
  • Carryover rules
  • Pay rates
  • Time off balances; and
  • Posting requirements

Oregon Sick Time Law Overview

Oregon's Sick Time Law is part of the wider set of Oregon Labor Laws that govern the state's employment practices. All of these should be clearly documented for employees in Oregon Labor Law Posters and an employee handbook.

Note: It's important NOT to confuse the Oregon Sick Time Law with the Oregon Family Leave Act (OFLA) or Paid Leave Oregon, which are both additional sick leave laws for employers. 

Here's an overview of what employers need to know.

Employee Sick Time Entitlement

Beginning on January 1, 2016, the majority of existing Oregon employees became qualified to begin accruing sick time off. Employees hired after that date are eligible to attain sick time off upon his or her employment start date, beginning with a minimum of 40 hours during the calendar year. 

Employees become eligible to use sick time once he or she has worked for an employer for at least 90 days.

An employer's size and location will determine whether the sick time employees receive is paid (Greater than 9 Employees in Oregon, OR greater than 5 Employees in Portland) or unpaid (anything smaller than the former in either location).

Eligible Employee Types for Sick Time

All full-time, part-time, temporary, and seasonal employees who provide service to an employer are considered employees under Oregon's sick time law and are eligible to receive protected sick time off.

The exceptions to this rule include:

• Employees receiving sick pay under the Family and Medical Leave Act (FMLA)
• State or federally administered work training program participants
• Independent contractors
• Work-study program participants
• Those employed by his or her parents, spouse, or child
• Railroad Unemployment Insurance Act-exempt workers

Employee Sick Time Allowable Uses 

Employees can use sick time if he or she are seeking treatment or recovering from being sick or injured, or have other health conditions. Employees can also use sick time to

• To care for themselves or a family member with any of the following:
  • Mental or physical illness
  • Injury or health condition
  • A need for medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition, or need for preventive medical care
• If the employee or a family member has a serious health condition defined as:
  
  • Requiring inpatient care
  • Posing an imminent danger of death or the possibility of death
  • Requiring constant continuing care
  • Involving a period of incapacity
  • Involving multiple treatments
  • Involving disability due to pregnancy
• To care for an infant or newly adopted child under 18 years of age, or for a newly placed foster child under 18 years of age, or for an adopted or foster child older than 18 years of age if the child is incapable of self-care because of a mental or physical disability, completed within 12 months after birth or placement of the child
• To complete necessary activities before the adoption of a child or having a foster care child join your home
• To recover from or seek treatment for a health condition that renders the employee unable to perform at least one of the essential functions of his or her regular position
• For any absences regarding the death of a family member, including:
  
  • Attending a funeral or a related service of a family member
  • Planning needed due to the death of a family member
  • Grieving the death of a family member
• For any absences regarding domestic violence, harassment, sexual assault, bias crime, or stalking, including:
  • Seeking legal or law enforcement assistance or remedies to ensure the health and safety of the employee or his or her minor child / dependent, including preparing for and participating in protective order proceedings or other civil or criminal legal proceedings related to domestic violence, harassment, sexual assault, bias crime, or stalking
  • Seeking medical treatment or recovery for the employee or his or her child / dependent who suffered injuries from the event
  • Finding or assisting a child or dependent with finding a mental health specialist regarding experiences to the event
  • Acquiring services from a victim services provider for the employee or his or her minor child / dependent
  • Relocating or taking steps to secure an existing home to ensure the health and safety of the employee or his or her child / dependent
• In the event of a public health emergency, including but not limited to:
  
  • Closure of the workplace or the child / dependent’s school or care facility by order of a public official due to a public health emergency
  • If the employee or his or her family member is deemed by their health care provider or a public health authority to cause a public health risk to the community
  • A law or rule preventing an employee from being in the workplace due to health concerns

Effective September 26, 2025, Oregon passed Senate Bill 69, which allows employees to qualify for Oregon Sick Time for events that would also qualify under Paid Leave Oregon.

Additionally, effective January 1, 2026, employees can use sick time for blood donations that are officially connected with the American Association of Blood Banks or the American Red Cross.​

In certain cases, sick time may even be donated to other employees.

Oregon Employer Requirements for Sick Time 

The Oregon Paid Sick Time Law has numerous employer requirements that govern the notification, education, and provision of sick time to employees.

Sick Time Law Notice / Posting Requirements

Employers must post an Oregon Sick Time Poster or comparable notice in a public space where employees can easily view it. This notice should include information on employees' basic sick time rights under the state's law. An official poster is also available in Spanish. 

It’s important for employers to update labor law posters regularly to ensure accurate rules based on legislation. Subscribing to a labor law poster service can ensure that posters are always up-to-date and keep businesses compliant under several labor laws, including the Oregon Sick Time Law.

Paid or Unpaid Requirements by Employee Size and Location

Any-sized employer needs to comply with this legislation; the only question a company may have is whether or not the minimum 40 hours of protected sick time provided is paid or unpaid, which will be determined by location and number of employees.  

• Paid Sick Time Off must be provided if: 
  • The business is located in Oregon AND has 10 or more employees, or
  • The business is located in Portland AND has 6 or more employees

• Unpaid Sick Time Off must be provided if:
  • The business is located in Oregon AND has less than 10 employees, or 
  • The business is located in Portland AND has less than 6 employees

In either scenario, employers may require that employees wait until their 91st day of employment to begin using this sick time. 

How Does Sick Time Work with Paid Leave Oregon?

Effective September 3rd, 2023, employees with access to unpaid sick time through smaller employers may still be eligible for pay during that time off from Oregon's state fund through Paid Leave Oregon. Note that employees with access to paid sick time may also be eligible for Paid Leave Oregon, regardless of whether that employee has exhausted paid sick time and / or paid time off. However, employers can not require the employee to use up or exhaust either paid time off 'bucket' prior to use. 

Requirement to Provide Employees with Quarterly Sick Time Balance Statements

In addition to the posted notification of the law's overview, employers must give a written notification to employees of the sick time accumulated, both used and unused. This must be done at least quarterly, and balances can be posted in multiple places, such as within employee portals in the company's payroll software or on each paycheck or pay stub.

How to Structure an Oregon Sick Time Policy

Oregon's paid sick time law allows employers to choose from two different options when determining how employees can attain sick time off hours. To save some time, check out our Oregon Sick Leave Policy Samples.

Both methods can actually be used within the same organization to cover different employee classifications or categories of employees. For example, an employer can use the accrual method outlined below for part-time staff, and the front-loaded method for full-timers. As long as the distinctions are uniform and don't impact requirements, Oregon's sick leave law allows for flexibility in calculation rules.

1. The Accrual Method

The accrual method skips the need for prorating because hours accumulate as employees work. Using this calculation-based method to accrue time off, eligible employees must be given one hour of sick time per 30 hours worked (which equates to about 1 & 1/3 hours for every 40 hours worked).

Choosing this method, the accrual of sick time off begins on the first day of an employee's employment and is applicable whether the eligible employee is full-time or part-time.  

Once the accrued 40-hour minimum is reached, an employer can either choose to stop adding sick time hours or continue if the sick time policy is more generous than the minimum amount the law requires (using the state-required calculation above would add up to about 70 hours in a given year for a full-time employee).

Using the accrual method, up to 40 unused hours can be carried over by employees from the previous year into the next year, which can lead to a total of 80 sick hours in one calendar year. However, carryover is not required for the front-loaded method. 

2. The Front-Loaded Method

The front-loaded method means full-time employees receive 40 hours of sick time upfront per 12-month period. Depending on the type of yearly tracking used, prorating may or may not be necessary. For instance, if an employee starts mid-year and the employer tracks time by his or her anniversary date, no prorating is necessary. However, if the employer tracks by calendar year, starting January 1st, someone beginning employment on July 1st will receive 20 hours of front-loaded sick leave.

Part-time employees are not eligible for the front-loaded calculation method because, under the law, employers must load 40 hours at the beginning of the year. The only exception is if an employee starts work at some point later in the year.

How to Calculate Oregon Sick Time Pay Rates

Each employee receiving sick pay in Oregon must be paid at the regular rate of pay, which can be calculated in the following manner:

• Employees with One Hourly Rate of Pay: The employee earns the hourly rate he or she would have earned for working during the same period that the sick time is used.
• Employees with Multiple Rates of Pay: The employee earns either a weighted average of the regular rates earned during the previous pay period or, if known, the wages he or she would have earned during the period of time the sick leave is used.
• Salaried Employees: The employee earns the total wages for the pay period covered by the salary, divided by the total number of hours to be worked in the pay period. When total hours vary from week to week, 40 hours should be used to calculate the sick pay.
• Commission, Piece-Rate, and Quantity Basis Paid Employees: The employee earns no less than the state or local minimum wage rate.
• Hourly, Weekly, or Monthly Paid Employees Who Also Receive Commission or Piece Rate Pay: The employee earns either the state or local minimum wage rate, or a rate equal to their hourly, weekly, or monthly rate (whichever is higher).

Overtime, bonuses, incentives, tips, and holiday pay are not part of an employee's regular rate of pay, although differential pay such as shift differentials must be included. In addition, employers are not obligated to pay employees who are no longer employed any unused accrued sick time. 

Accurate leave management processes are important for calculating and tracking time off and remaining in compliance with state law.

How To Manage Oregon Sick Time Processes

Managing sick time off or sick leave means following a documented process to stay compliant with Oregon's sick time laws. The process employers choose or have access to will directly correspond to the amount of time and number of manual steps needed to take in order to document, administer, and manage sick time to ensure compliance.

1. Manual Sick Time Management Processes

Manual documentation and management typically involve using templates, spreadsheets, and other databases to enter sick time data by hand. For instance, payroll staff might use a Sick Time Notification Template to keep employees informed of any existing bank of sick time. Accruals would typically be tallied with calculators or in spreadsheets. While any sick time information passed from employee time off requests to payroll may be disorganized and come from a variety of sources, such as emails, company forms, and verbal requests.

Another downside to manual entry is that employers must constantly update existing information in order to stay compliant with Oregon's sick time and leave regulations. This method can be cumbersome and somewhat time-consuming. It may also lead to costly compliance issues or calculation errors because the various entries are decentralized and therefore don't "talk to each other" to ensure checks and balances take place.

2. Semi-Automated Sick Time Management Processes

This option automates certain parts of the payroll process, such as recording sick time requests and time off balances using a leave management or time and attendance software. This will typically keep employees up-to-date in an organized manner, but may not seamlessly integrate with a payroll system and require dual data entry.

While some processes are automated, the focus still isn't on full accessibility, deep analytics, integration, or intuitive processing to address regional regulations, which means payroll personnel have to perform extra steps and spend precious time answering employee questions. 

3. Fully Automated Sick Time Management 

When leave management is fully automated, embedded reports, analytics, and dashboards help employers stay on track with sick time through closed-loop administration. Employers should have built-in checklists with customizable steps and processes, and notifications / alerts for an effective system. This should assist with compliance, streamline leave management processes, and reduce any leave administration errors. 

Employees should also have access through a self-service interface that allows him or her to request time off and view sick time information for accrued time, current balances, and time taken using smartphones, computers, or other devices.

Sick time data should be updated in real-time upon the approval of any employee requests and flow right into payroll under the correct earning codes, removing the need for traditional preprocessing and making compliance pretty easy. 

Costly Consequences of Non-Compliance with Oregon's Sick Time Law

Making sure the business is compliant with the state's sick pay requirements might seem complicated, but getting caught ignoring or not properly complying with the law comes with far greater and costlier legal challenges.

Here are three major dilemmas employers can avoid with a little proactive effort to follow Oregon's sick time provisions.

Oregon Sick Time Law Fines and Penalties

Formal complaints can be filed by employees against employers failing to uphold Oregon's sick pay laws, or if the employer retaliates against him or her for using sick time by terminating, reducing hours, or taking other adverse employment action. The Oregon Board of Labor and Industry can issue civil penalties of up to $1,000 per violation. This is in addition to the fees paid to complainants for lost wages and sick pay.

In addition, failure to pay for any sick time used may subject employers to Oregon's civil penalty for withholding wages, which can be up to eight times an employee's regular wages.

Legal Defense Fees

In the U.S., a company has a 10% chance of having an employee lawsuit brought against it. According to The Hiscox Guide to Employee Lawsuits, retaliation is the most common charge employees make in lawsuits against small-to-midsize employers. The average defense and settlement costs for such employee lawsuits are $160,000.

A court judgment that is successful against an employer will require the employer to be responsible for the employee's legal fees.

Bad Press for Employers

Besides the direct costs, noncompliance can leave employers vulnerable to more subtle forms of financial depletion. The unfavorable press can make talent scouting a challenge, as more and more candidates research employers on the internet before beginning the interview process or prior to accepting a position.

Staff morale may also dip once word gets out that labor laws aren't being adhered to. A 2017 study by International Business Research found that low morale is significantly tied to low employee motivation and productivity levels, which can negatively impact a company's bottom line.

Get Help With Oregon Sick Time Compliance

Businesses that struggle with maintaining productivity when employees take time off under Oregon Sick Time may want to consider employee scheduling software as a solution, so that when employees take leave, such as Oregon Sick Time, you can ensure your schedule accounts for it.

Keeping compliant with the Oregon Sick Time law can be challenging, but with the help of an experienced Oregon payroll company, managing paid and unpaid employee leave becomes easier while reducing non-compliance risks.

Contact us today to get connected, or start your search to find a provider now.

Guest Author: Scott Herson-Hord

Scott Herson-Hord is the CEO of Great Northern Staff Administrators (GNSA), an Oregon payroll 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).