What is Paid Leave Oregon and how is it going to affect your business?
Paid Leave Oregon is a New State-run employee time off program. Oregon will start payroll deductions on January 1st, 2023. Paid leave requests will start being processed and paid by The State of Oregon on September 3rd, 2023. Who is going to pay for all that paid time off you ask? Great question! The employees themselves and their employers. This is how the payment breaks down.
- Cost of the program is estimated to be 1% of employees gross wages.
- 60% of the contribution will be paid by employees taken out of each paycheck
- 40% will be paid by the employer (unless you are under 25 employees then this contribution is optional)
Employee Portion of Paid Leave Oregon
What would this look like for a minimum wage full time Employee (minimum wage being $13.50/hour as of September 2022.)?
The employee will be paying 60% of the 1% of gross wages.
|Employee Bi-Weekly Paycheck||Employee Monthly Paycheck||Employee Annual Cost|
|$1,080 (paycheck) x .006 (PL Tax)= $6.48 (Cost to employee)||$2,160 (paycheck) x .006 (PL tax) = $12.96 (cost to employee)||$25,920 (paycheck) x .006 (PL tax) = $155.52 (cost to employee)|
Employer Portion of Paid Leave Oregon
What would this look like for an Employer using the employee example above?
The employer will be paying 40% of the 1% of gross wages.
|Employer Bi-Weekly Paycheck||Employer Monthly Paycheck||Employer Annual Cost|
|$1,080 (paycheck) x .004 (PL Tax)= $4.32 (Cost to employer)||$2,160 (paycheck) x .004 (PL tax) = $8.64(cost to employer)||$25,920 (paycheck) x .004 (PL tax) = $103.68 (cost to employer)|
What do Employee’s get by participating in Paid Leave Oregon?
Time Off with Pay
- Employees can take up to 12 weeks of paid time off in a year
- If an employee is pregnant, has given birthday or has health issuers related to childbirth, they may be able to take up to two more weeks, for a total of 14 weeks.
- Employees can take leave for a week or a single day at a time
- By law, each job is protected while the employee is on leave if that individual has worked at least 90 days for that employer.
- By law, the employer can not fire the employee or threaten them for taking time off if the employee is eligible.
- By law, if an employee has worked for an employer for at least 90 days, and the employee takes paid leave, the employee has the right to the same job position they had when they left. This means the employee does not lose their job title or role.
Types of Leave Covered for the Employee
Events that happen in an employee’s life or in an employee’s family member’s life that keep them from working may mean they qualify for coverage. These can fall into three different categories: Family, Medical and Safe Leave.
- The birth of a child
- Bonding with a child:
- In the first year after birth.
- Through adoption.
- When they’re placed in your home through foster care.
- To care for a family member with a serious illness or injury.
To care for oneself when an employee has a serious illness or injury.
For survivors of sexual assault, domestic violence, harassment, or stalking.
Who is a “Family Member”
A “family member” is any of the following:
- An employee’s spouse or domestic partner.
- An employee’s child or the child’s spouse or domestic partner.
- An employee’s parent or An employee’s parent’s spouse or domestic partner.
- An employee’s sibling or step-sibling or their spouse or domestic partner.
- An employee’s grandparent or An employee’s grandparent’s spouse or domestic partner.
- An employee’s grandchild or An employee’s grandchild’s spouse or domestic partner.
- Anyone An employee’s is related to by blood or anyone who lives with or is connected to an employee like a family member.
What do Employer’s Get by Participating in Paid Leave Oregon?
Less Human Resources for Employers
- Employers are not responsible for making payments into Paid Leave Oregon if they are a small employer with fewer than 25 employees. Your employees will still pay their portion and get the same benefits.
- Employers should work with a payroll company to make sure all Paid Leave Oregon payments are taken from employees paychecks starting January 1st 2023.
- Employers are not responsible for deciding if an employee is eligible or managing any employee claims. Paid Leave Oregon takes care of that.
- Employers are not responsible for paying your employees when they take Paid Leave. Paid Leave Oregon pays them an amount while they take time off. (Most employees will receive 100% wage replacement).
- Employers should receive a 30 notice from their employee of a planned Paid Leave (such as for a birth of a child)
- Employers will be notified within 24 hours and then given written notice within three days of a starting emergency paid leave.
- All Employers must notify employees of the Paid Leave Oregon Plan in writing.
Does my business have to participate in Paid Leave Oregon?
No, you can submit an equivalent paid leave plan to the state of Oregon for approval. Your equivalent plan must provide benefits that are equal to or greater than the benefits Paid Leave Oregon Provides. If you already offer paid leave to your employees or ar thinking about doing so, you can apply for it to be an equivalent plan.
Please keep in mind that an equivalent pan means:
- The employer offers the same or more benefits than Paid Leave Oregon offers.
- The employer cannot deduct more from employee’s contributions than Paid Leave Orgon
- The employer must first have the Oregon Employment Department approve the plan.
All employees will be contributing to the Oregon Paid Leave system starting January 1st, 2023. Employees will be contributing 60% of the 1% of their gross wages through their paycheck. All employers over 25 employees will be contributing 40% of the 1% of their employees’ gross wages starting January 1st, 2023. Everyone who is an employee will now have access to Paid Leave through the state of Oregon starting September 3, 2023.
If you are self-employed or a 1099 contractor, click here to learn about your options.
Withholding Contributions for Paid Leave Oregon
Starting Jan. 1, 2023, employers will be required to start withholding contributions for Paid Leave Oregon.
Starting with the first quarter of 2023, employers will report Paid Leave Oregon subject employee wages, employee contributions based on those wages, and employer contributions on a revised Form-OQ (Oregon Combined Quarterly Report). The Form OQ is filed with OED through Frances Online.
Also starting with the first quarter of 2023, contribution payments will be made to the Oregon Department of Revenue (DOR) on or before the due date of the Oregon Combined Quarterly Report (the last day of the month following the quarter to which the report relates).
Starting with the first quarter of 2023, employers will also begin reporting Statewide Transit Tax withholding on the Combined Quarterly Report. However, annual Statewide Transit Tax filers will continue to file through Revenue Online or by paper using the Form STT-A. Statewide Transit Tax reporting for tax periods prior to the first quarter 2023 are still reported through the current process directly to DOR in Revenue Online or using the old paper reports (e.g. Form STT-1, Form STT-2, Form STT-A).
The payment voucher, Form OR-OTC-V, and Revenue Online, have been revised to include a line for employers to make their Paid Leave Oregon and Statewide Transit Tax payments. Employers will have the same payment options currently available—ACH, Revenue Online, cash, check, or money order. The best way to pay is electronically on Revenue Online.
Additional Resources from Paid Leave Oregon
Employer guidebook: The guidebook is now available on our website in six languages and found on our resources page. This guidebook provides detailed information for employers about the Paid Leave Oregon program including employer responsibilities and detailed contribution and benefit information.
OFLA-FMLA Comparison Chart: This chart, designed in partnership with the Bureau of Labor & Industries (BOLI), shows the differences between Paid Leave Oregon, the Family and Medical Leave Act (FMLA) and the Oregon Family Leave Act (OFLA). It is also available on our resources page
Still have questions? Visit the Employer FAQ page. The State of Oregon is continuing to update these pages with resources for employers.
Bancorp’s insurance agents are available to provide you with a free review and consultation. Contact Us – Bancorp Insurance Call 800-452-6826
Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our agents.