As of January 2023, Oregon businesses must manage compliance with Oregon Paid Lave, a new paid leave law creating requirements regarding a state-paid leave fund. Oregon employers need to ensure they are prepared to comply with and understand the contribution rates as well as other responsibilities under the new legislation.
Oregon Paid Leave in 2024 and 2025
In addition to Oregon Sick Time and Oregon Family Leave, businesses must also manage compliance with Paid Leave Oregon, a state-run paid leave program that makes paid leave available to employees who may otherwise not have any.
For employers, this means a new Oregon State payroll tax and deduction that employers must keep track of as well as contribute to.
Here are the requirements for Oregon Paid Leave.
Oregon Paid Leave Requirements
As of January 2023, payroll contributions must be made by employers in Oregon to the state's paid leave fund regardless of company size. Payroll contribution rates will be set by the state annually and cannot exceed 1%.
For Companies with 25 or More Employees
- The contribution rate for employers and employees will be 1%
- Employees will contribute 60% of that 1%
- Employers will contribute 40% of that 1%
- Employers can pay the employee portion and consider it a benefit
For Companies with Less Than 25 Employees
- The contribution rate for employees will be 1%
- Employers can pay the contribution and consider it a benefit
Payroll contributions accumulate in a state fund, which will be used to cover employee-paid leave. Starting September 3, 2023 employees will be able to start applying for paid leave.
This contribution is only required for up to $132,900 of an employee's wages for 2023. For 2024 and 2025, contributions apply for up to $168,600 of wages.
Other Oregon Sick Time and Leave Requirements
Through June 30, 2024, this paid leave program runs in conjunction with Oregon Sick Time Law and the Oregon Family Leave Act (OFLA), entitling to 12 weeks of protected employee paid leave for family, medical, or safe (i.e. harassment, stalking, etc.) reasons. Companies must adhere to any legislation they are required to comply with across these sick leave laws.
Check out Oregon's Minimum Wage to learn more about the compensation requirements of the state.
Paid Leave Oregon 2024 Updates
Starting July 1st, 2024, employees will no longer be able to stack various types of leave (including leave under Paid Leave Oregon) which could add up to 36 weeks of OFLA leave.
The new updates to Paid Leave Oregon will prevent the two from running concurrently with one another. While time off under Paid Leave Oregon and OFLA leave may still overlap, Paid Leave Oregon will no longer cover qualifying events such as sick child leave, military family leave, or bereavement leave.
Employees will also be able to “top-up” their PLO benefits with paid time off. In other words, when Paid Leave Oregon does not completely replace wages, employees may use accrued paid sick leave to “top up” their PLO benefits, up to 100% of the employee’s wages.
Lastly, Paid Leave Oregon benefits will be exempt from most forms of garnishment, with the exception of child or spousal support garnishments, as well as restitution for crime victims.
Get Help With Oregon Paid Leave
Adjusting to new legislation can be difficult. An Oregon payroll service can help navigate these changing laws and update your payroll processes to help ensure compliance with Oregon payroll laws. As always GNSA is ready to assist customers with new requirements through the PeoplePro Platform.
Additionally, with so many different types of leave in the state, it is important for Oregon businesses to ensure that they have the proper employee scheduling tools in place to ensure they always have the right people they need at the right time, in addition to maintaining compliance with things like Oregon predictive scheduling.
GNSA can help companies navigate and adapt their policies to comply with the update in addition to helping take care of the payroll tax calculation, withholding, and remittance, ensuring accuracy and that payroll taxes are done correctly. Contact us today to learn more.
Companies can find more information on the Oregon Paid Leave website, as well as sign up for alerts regarding the new paid leave insurance program from the Oregon Employment Department.
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