Legal Alerts

Oregon to Ring in the New Year with Paid Leave Program

Portland, Ore. (October 7, 2022) - Paid leave is finally coming to Oregon. In 2019, Oregon Governor Kate Brown signed HB 2005, which laid the groundwork for the establishment of a paid family and medical leave insurance (PFMLI) program for Oregon employees. Paid Leave Oregon, the implementing program, becomes effective January 1, 2023, and will provide employees with paid leave for qualifying purposes as of September 3, 2023. In enacting this program, Oregon joins a handful of other states with similar paid family and medical leave insurance.

The program does not supplant other types of leave, such as federal FMLA and OFLA, but rather supplements it by providing paid leave. If multiple types of leave are applicable to the employee’s qualifying purpose, the employee is required to take concurrent leave.

Starting January 1, 2023, employers with 25 or more employees that do not have approved equivalent plans will begin contributing to the plan. Employers are responsible for 40% of the contribution rate, while payroll deductions from employee paychecks make up the remaining 60%. The contribution rate for 2023 will be 1% of employee gross wages. For example, an employer with $1 million in payroll will pay $10,000 each year into the fund. $6,000 is paid from employees’ earnings, and 40% is contributed by the employer.

Employers with less than 25 employees do not need to contribute to the fund but will be responsible for collecting and submitting employee contributions.

If an employer seeks to opt out of participation in the program by applying for an equivalent plan exemption, applications are currently open.

A model notice poster must be displayed at each worksite as of January 1, 2023, and contributions begin the same day. As noted above, qualifying employees will be eligible to apply for leave on September 3, 2023.

Qualifying employees are those who:

1. earned $1,000 or more in the year prior to applying;
2. contributed to the Paid Leave Oregon fund in the base year (the first four of the last five completed calendar quarters) or alternate base year (the last four completed calendar quarters);
3. are experiencing a “qualifying purpose”;
4. applied for benefits; and,
5. have not received workers’ compensation insurance benefits during the same period they are seeking benefits from the program.

Qualifying purposes include:

1. Family leave for the birth of a child or to bond with a child in the first year after birth, through adoption, or when placed in the employee’s home through foster care.
2. Family leave to care for a family member with a serious health condition.
3. Medical leave to care for themselves when they have a serious illness or injury.
4. Safe leave to seek assistance for themselves or their minor child related to domestic violence, harassment, sexual assault, or stalking.

Employers should begin preparing as soon as possible to ensure compliance with this program or to opt out in a timely manner. Failing to file or complete all required reports or pay all contributions prior to September 1 of each year will result in a penalty equal to 1% of the wages of the employer’s employees in the previous calendar year.

For more information on this new law, contact the authors of this alert. Visit our Labor & Employment Practice page for additional alerts in this area.

Authors:

William Stinman, Associate

Jacqueline Houser, Partner

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• Labor & Employment

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