Oregon Paid Family Medical Leave Law – What Employers Need to Know
Disclaimer: Final rules for Paid Leave Oregon are still evolving. Check back with HR Annie or Aldrich Advisors until final rules apply for the most up-to-date information.
Balancing caring for a newborn or ill family member and your job can be challenging, forcing many to leave their jobs. Unfortunately, some don’t get their jobs back. This tends to affect lower wage earners disproportionately.
Oregon is the ninth state to pass a Paid Family and Medical Leave law to reduce the strain on workers dealing with family and medical issues. The Oregon Paid Family Medical Leave Law (PFML) requires employers to allow employees to take paid time off for qualifying events.
Several other states have also implemented their own version of PFML. For questions about your state, please reach out to us!
Continue reading for a rundown of what employers need to know about the Oregon Paid Family Medical Leave Law.
Who is Eligible for Oregon Paid Family Medical Leave?
Eligible employees include those that:
- Earned more than $1000 per year
- Contributed to the program through payroll deductions
- Worked part- or full-time
Employees who have worked for the employer for 90 days or more before taking OR PFML will receive job protection and continued benefits while on leave. Employees can expect to return to their original – or closest available equivalent – role when they return from leave.
Employers with 25 employees or less have more flexibility with job protection if the employee’s original role no longer exists when they return from leave. Small employers should place the employee in a position with similar duties and the same benefits and pay.
Oregon law says it’s unlawful to deny leave or interfere with the right to leave. Employers cannot retaliate or discriminate against employees for asking about the right to take leave.
Employee and Employer Contribution
Employers with 25 or more employees will participate in the program. Employees and employers will share the program costs – 60% contribution from employees and 40% from employers. Employers can choose to fund the employees’ portion as an employer-offered benefit.
For employers with 25+ employees who are using the state program, employees and employers can begin contributing beginning January 1, 2023.
Small employers (fewer than 25 employees) are NOT required to pay the employer portion. You will still need to collect and submit your employees’ shares. However, if you decide to make the 40% employer contribution, you’ll be eligible for assistance grants.
The 2023 employee contribution rate is 1%, meaning payments shouldn’t exceed 1% of employees’ gross wages.
What Life Events Are Covered by PFML?
Paid Leave Oregon has three main categories for qualifying life events: Family Leave, Medical Leave, and Safe Leave. Oregon employees can use PFML in the following situations:
- Family Leave:
- Giving birth to a child
- Bonding with a child after birth, adoption, or foster care placement
- Medical Leave:
- Caring for yourself or a family member with a serious illness or injury
- Safe Leave:
- Seeking assistance, treatment, or relocation due to sexual assault, domestic violence, harassment, or stalking
For medical leave, serious health conditions are defined as the following conditions:
- Requires hospitalization, hospice, or placement in a medical care facility
- Poses imminent danger of death, are terminal in prognosis, or require constant care
- Disabilities due to pregnancy
Oregon’s definition of “family” is very broad: “Any individual related by blood or affinity whose close association with a covered individual is the equivalent of a family relationship.”
What Benefits Do Employees Receive?
Employees that earn less than 65% of the state’s income level will receive 100% of their pay.
Employees earning more than 65% of the state’s average weekly wage (SAWW) will receive 65% of the SAWW + 50% of the employee’s average weekly wage above 65% of SAWW.
The minimum benefit is 5% of the SAWW (approximately $57), and the maximum weekly benefit shouldn’t exceed 120% of the SAWW (approximately $1,376).
Once an employee’s leave claim is approved, employees can claim their benefits in increments of one work day or work week.
While an employee is on PFML, you don’t pay them as an employer. Instead, Paid Leave Oregon will pay the employee the appropriate amount of their wages while on leave.
Employees can supplement their weekly leave benefits with their available vacation or sick pay to earn up to 100% of their average weekly wage.
OR Paid Family and Medical Leave Duration
The Oregon Paid Family and Medical Leave Law grant employees a maximum of 12 weeks of paid leave per year. Employees are provided an additional two weeks for a total of 14 weeks for pregnancy-related limitations.
Oregon employees can use their paid leave time consecutively or one day at a time.
Reminder: PFML runs simultaneously with OFLA and FMLA. Reach out to your benefits provider if you’re unsure if this applies to your situation and business.
Are Private Equivalent Plans Allowed?
Yes, employers can apply for approval to offer a private equivalent plan instead of Paid Leave Oregon.
Paid Leave Oregon defines an equivalent plan as “a plan offered by an employer that offers benefits that are equal to or greater than the benefits provided by Paid Leave Oregon.”
An employer’s private plan must provide the same benefits as the state plan and be offered to all employees employed for 30+ days. The private plan can’t cost employees more than what they’d pay for Paid Leave Oregon.
Once approved, your plan is good for one year. You’ll need to reapply for approval every year or if anything changes. Employers can submit an equivalent application starting September 2022. Learn more about the application process here.
How Can Employers Prepare?
Now that you’re familiar with the Oregon PFML, here’s what we recommend employers should do next to prepare:
Before January 1, 2023:
1. Decide if you’ll offer an “equivalent plan” instead of the state program. Read more about equivalent private plans and how to offer one here.
2. Prepare to make employer payments based on your business size and the salary amount you pay. Remember, employers with 25+ employees pay 40% of the contribution rate.
To calculate how much you’ll need to pay, use this formula:
Amount paid per year in payroll x 1% = Total paid into Paid Leave Oregon per year
Total paid into Paid Leave Oregon x 40% = Your employer contribution per year
3. Provide written notice to employees explaining Paid Leave Oregon. The notice should include:
- Their rights under the program
- When employee payroll contributions begin (January 1, 2023)
- When they can start applying for benefits (September 3, 2023)
- How to file a claim
- That their job is protected (if they’ve worked for you for 90+ days)
4. Prepare for employee payroll deductions. Employees, no matter the employer size, will fund 60% of the program’s costs through paycheck deductions.
Starting January 1, 2023:
- Employee payroll contributions begin. Collect the 60% contribution payments from your employees’ paychecks.
- Start making your employer payments (unless you have fewer than 25 employees).
Starting September 3, 2023:
- Eligible employees can start applying for benefits. Employers are not responsible for managing the claim process or deciding if an employee is eligible – Paid Leave Oregon will handle this.
The Oregon Paid Family and Leave Law will continue to evolve, and we plan to keep you updated the entire way! Reach out to HR Annie or our trusted benefits advisor partner, Aldrich Benefits, for more information and how to prepare for implementation.
For more information, check out the following trusted resources:
Aldrich Benefits LP
- Oregon Paid Family Leave Law Overview
- Oregon Paid Family Leave Law FAQ
- Paid Family Leave Comparison: Oregon + Washington
Paid Leave Oregon