Paid Leave Oregon: What Businesses and Employees Should Know

Paid Leave Oregon has provided benefits since Sept. 3, 2023, and was the first state-run program in the country to offer 100 percent wage replacement for low-wage workers. Paid Leave Oregon is designed to provide compensated time away from work to covered individuals while they are on qualified family leave, medical leave, or safe leave. 

For those who meet the criteria, the state-run program provides up to 14 weeks of paid leave. 

The Oregon Employment Department issued final rules for the Paid Leave Oregon program, effective Aug. 1, 2024, updating key definitions and clarifying benefit calculation.

How Is Paid Leave Oregon Funded?

Employers and employees contribute to the Oregon PFML Insurance Fund that provides wage replacement for eligible employees who take leave for qualified reasons under Paid leave Oregon. The total contribution rate for 2024 is 1% of gross wages up to $168,600. The contribution rate is determined at the beginning of every year, but that rate may not exceed 1% of an employee’s gross wages. Additionally:

• Employers contribute 40 percent.
• Employees contribute 60 percent.

Who Is Exempt From Contributing to Paid Leave Oregon?

There are two exceptions to the percentage of contributions. Employers with fewer than 25 employees are not required to pay the employer contribution. They will be required to collect and remit the employee premium. However, if an employer with fewer than 25 employees chooses to pay the employer contributions, the employer may apply to receive a grant set forth in the Oregon PFML.

Second, an employer may elect to pay the required employee contributions, in whole or in part, as an employer-offered benefit.

Employers are responsible for filing a combined quarterly report of wages earned and contributions paid on a form prescribed by the Department of Revenue. The report must be accompanied by payment of any contributions due.

Who Is Eligible for Paid Leave Oregon Benefits?

Under Paid Leave Oregon, an eligible employee must have:

• Earned at least $1,000 in wages during the base year (defined as the first four of the past five completed calendar quarters proceeding the benefit year), or
• Earned at least $1,000 in wages during the alternate base year (defined as the last four completed calendar quarters proceeding the benefit year).

An employee is defined as an individual performing services for an employer for pay or under any contract of hire, written or oral, express or implied. Paid Leave Oregon does not apply automatically to independent contractors. However, if the independent contractor has opted in and makes contributions to the program, they would qualify to receive benefits. Employers can check on whether an independent contractor is registered in the Paid Leave Oregon system and is contributing payments.

What Are Reasons for Qualified Leave Under Paid Leave Oregon?

Eligible leave will include time away from work that is used for the following reasons, individually or in any combination:

• To care for and bond with a child through birth, adoption, or foster placement within the first 12 months
• To care for a family member with a serious health condition (see below for a definition of “family member”)
• To care for an employee’s own serious health condition 
• Safe leave to seek medical, legal, or law enforcement assistance to address an incidence of domestic violence, harassment, sexual assault, or stalking 

Paid Leave Oregon benefits are not available for leave taken for active military service, impending active duty in the Armed Forces, or the death of a family member, although leave under other state and federal leave laws might apply for those reasons.

How Is “Family Member” Defined Under Paid Leave Oregon?

Oregon’s definition of “family member” includes a spouse, a parent, a sibling or stepsibling, a grandparent, a grandchild, a domestic partner, and an individual related by blood or who lives with or is connected to the eligible employee like a family member. The Paid Leave Oregon website also provides definitions of “parent” and “child.”

How Much Paid Time Is Available to Employees?

Employees eligible for paid leave may qualify for up to 12 weeks of family and medical leave insurance benefits per benefit year for leave taken for any of the following purposes, in any combination:

• Family leave
• Medical leave
• Safe leave

If the eligible individual is pregnant, has given birth, or has health issues related to childbirth, they may be able to take up to 2 more weeks for a total of 14 weeks.

Any family or medical leave taken under Paid Leave Oregon that also qualifies for unpaid leave under the Oregon Family Leave Act or under the federal FMLA must be taken concurrently. However, individuals might be eligible for additional unpaid time off under these other leave laws.

How Much Will Employees Be Paid for Qualified Oregon Paid Leave?

The benefits available to an employee are dependent on the employee’s average weekly wage.

If the eligible employee’s average weekly wage is equal to or less than 65 percent of the state’s average weekly wage, the employee’s weekly benefit amount shall be 100 percent of the employee’s average weekly wage.

If the eligible employee’s average weekly wage is greater than 65 percent of the state’s average weekly wage, the employee’s weekly benefit amount is the sum of:

• 65 percent of the average weekly wage; and
• 50 percent of the employee’s average weekly wage that is greater than 65 percent of the average weekly wage

There will be a maximum benefit amount equivalent to 120 percent of the state’s average weekly wage and a minimum benefit amount equivalent to 5 percent of the state’s average weekly wage. Benefits are payable only when monies are available in the PFML Insurance Fund.

What Are the Employer Notification Requirements for Paid Leave Oregon? 

Employers are required to provide written notice to employees of their rights under Paid Leave Oregon at the time of hire and each time the policy or procedure changes. Employers can utilize the model notice provided on the Paid Leave Oregon website. This notice must be in the language the employer typically uses to communicate with the employee. 

Can Employers Opt-Out of Paid Leave Oregon Program?

An employer who elects to offer an equivalent plan can seek exemption from Paid Leave Oregon contributions. To be approved, the employer must show the following:

• The plan is made available to all employees who have been continuously employed with an employer for 30 days.
• The benefits afforded to employees covered under the equivalent plan are equal to or greater than the weekly benefits and the duration of leave that an eligible employee would qualify under the Oregon PFML.

Employers must apply to opt out and pay an application fee. If the exemption is approved, neither an employer that provides benefits under an approved equivalent plan nor an employee covered under such a plan is required to make the Oregon PFML contributions.

Looking Forward

Paychex can help employers find a mix of benefits that attract good talent and then help maintain employee well-being. We also offer time-tracking solutions and provide HR Services to help your business stay ahead of ever-changing regulations. 

Additional resources

FAQs on Paid Leave Oregon website