In 2019, the Oregon legislature passed the Paid Family Medical Leave (PFML) Act, establishing a paid family and medical leave insurance program for Oregon workers that will be funded by employee contributions. After pandemic-related delays finalizing regulations and preparing for implementation, the program—now branded as “Paid Leave Oregon”—is finally taking effect. While some clarifying regulations are still pending, most of the key provisions have now been finalized and contributions to the Paid Leave Oregon fund are set to begin in January 2023, so it is time for employers to prepare for compliance.
The Paid Leave Oregon program will allow Oregon employees to take up to 12 weeks (or in some situations, up to 14 weeks) of paid time off for certain qualifying family and medical leave reasons beginning in September 2023. The program will be funded by employer and employee contributions to a fund administered by the Oregon Employment Department (OED), beginning January 2023. Small employers with fewer than 25 employees are not required to make employer contributions to the fund, but are required to make payroll deductions for employee contributions. While an employee is on paid leave, the OED pays the employee an amount of their wages through the Paid Leave Oregon plan (not via the employer). Alternatively, employers may comply with the PFML Act and avoid employer and employee contributions by establishing an “equivalent plan,” which the OED must approve in advance.
- Employers with at least one employee in Oregon are subject to the PFML Act.
- Self-employed individuals, independent contractors, and Tribal governments are not required to comply with the PFML Act. However, they may elect to participate in the Paid Leave Oregon program.
- The Paid Leave Oregon program will be funded by employer and employee contributions, beginning January 1, 2023.
- The OED will determine the contribution rate annually, subject to a statutory maximum of 1% of an employees’ wages. The contribution rate for 2023 is 1%.
- Employees contribute 60% and employers contribute 40% of the contribution rate.
- Employers must withhold employee contributions from employees’ pay, similar to payroll tax withholding.
- Employers with fewer than 25 employees will not be required to contribute the employer portion (but must still provide leave to their employees).
To be eligible for Paid Leave Oregon benefits, an employee must work in Oregon and must:
- earn at least $1,000 in subject wages in the base year or alternate base year;
- contribute to the Paid Leave Oregon Fund in the base year or alternate base year;
- experience a qualifying event;
- submit an application for benefits;
- have not exceeded their applicable maximum paid leave and benefit amounts; and
- not be disqualified due to receipt of workers’ compensation or unemployment insurance benefits during the same period, or because they previously willfully made a false statement or willfully failed to report a material fact in order to obtain benefits.
Benefits and Qualifying Events
Eligible employees may take up to 12 weeks of paid leave per benefit year for certain qualifying events:
- to care for and bond with a child during the first year after the child’s birth or placement through foster care or adoption;
- to care for a family member with a serious health condition;
- to care for the employee’s own serious health condition; or
- to seek medical, legal, or law enforcement assistance for the employee or the employee’s minor child or dependent related to domestic violence, harassment, sexual assault, or stalking.
Employees may take paid leave under the Paid Leave Oregon program in continuous or intermittent periods, in increments as short as one workday. Employees may take up to two additional weeks of paid leave for limitations related to pregnancy, childbirth, or a related medical condition, including but not limited to lactation, for a total of up to 14 weeks in a benefit year.
Paid leave benefits are administered and paid by the OED (not the employer), under the Paid Leave Oregon program. The amount an employee gets paid during leave depends on how much they have earned; some employees may receive 100% wage replacement, but some may receive less.
Employees who have been employed by an employer for at least 90 days before taking family or medical leave under the Paid Leave Oregon program are entitled to be restored to their prior jobs.
- Employers may require employees to provide them up to 30 days’ written notice of foreseeable leave.
- For unforeseeable leave, employers may require employees to give oral notice within 24 hours of commencing leave and written notice within three days.
- To require employees to provide notice, employers must have a written policy containing notice requirements, and must provide copies to employees upon hire and each time the policy is modified (including at the time of the policy’s creation).
- Employees seeking benefits under the Paid Leave Oregon program must submit an application to the OED, which must include their name, Social Security number, verification documents, employer information, notice given to the employer, and anticipated leave.
- The OED will notify the employer of the leave request, and the employer may provide additional information about the claim.
- The OED will communicate its decision to the employee after consideration (but the rules do not currently have a timeline for the OED’s decision).
Interaction with Other Leave
- Paid leave under the program is in addition to paid sick time under the Oregon Paid Sick Time law or other employer-provided paid time off.
- If the qualifying reason for taking paid leave under the Paid Leave Oregon program also qualifies for unpaid leave under the Oregon Family Leave Act (OFLA) and/or federal Family and Medical Leave Act (FMLA), the employee must take the OFLA and/or FMLA leave concurrently.
- Combined paid and unpaid leave is limited to 16 weeks per benefit year, or 18 weeks if the employee qualifies for leave related to pregnancy or childbirth.
Note: In response to comments raised during the rulemaking process, next year the Oregon legislature will likely consider and enact additional amendments to the PFML Act and/or OFLA to better address the interplay and reconcile differences between the paid and unpaid leave schemes, which may include: modifying OFLA’s covered employer and/or eligibility requirements to better align with Paid Leave Oregon’s requirements; modifying the lists of qualifying events for consistency among the leave laws; expanding OFLA’s definition of “family member” to match the Paid Leave Oregon definition; clarifying combined leave maximum amounts with respect to situations that allow additional leave; and/or clarifying concurrent usage requirements. The legislature may also consider updates to the Oregon Sick Time law to clarify the interaction with Paid Leave Oregon.
- To be exempt from paying required quarterly contribution payments to the Paid Leave Oregon program, a covered employer must have an approved equivalent plan in place.
- The OED regulations outline specific requirements and processes for equivalent plans, and establish deadlines by which employers must submit an equivalent plan application to be exempt from paying quarterly contributions.
- Employers began to submit equivalent plans on September 6, 2022.
- Employers must submit an equivalent plan application no later than November 30, 2022, to be exempt from paying first quarter contributions beginning January 1, 2023. Additional deadlines apply to avoid contributions in subsequent quarters.
- Employers must apply for re-approval annually for three years after OED initially approves the employer’s equivalent plan.
Self-Employed Individuals and Independent Contractors
The PFML Act does not apply to self-employed individuals or independent contractors. However, they may elect to opt into the program by providing a notice of election and making premium contributions to the OED. Such elections must be for a period of not less than three years. The OED has issued final regulations outlining the details and procedures for these individuals to participate in the Oregon Paid Leave program.
Tribal governments—defined as “a federally recognized sovereign Tribal government whose borders lie within this state or an intertribal organization formed by two or more of those governments”—also are not required to participate in Paid Leave Oregon. However, they may elect to participate in the program with respect to some or all of their businesses. Voluntary participation is for a period of not less than three years. The OED has issued proposed rules setting forth details and procedures for Tribal governments to opt in to the Paid Leave Oregon program, but they are not yet finalized.
This article summarizes aspects of the law and does not constitute legal advice. For legal advice for your situation, you should contact an attorney.