Oregon Paid Family and Medical Leave

At a Glance

• Oregon passed a Paid Family and Medical Leave Law that will provide employees with up to 12 weeks of leave.
• Contributions begin January 1, 2022 and will be through a payroll tax.
• Employers will contribute 40% of the total rate set by the director, while deducting the remaining 60% from each employee’s wages
• An employee’s weekly benefit amount is capped at 120% of state average weekly wage.
• Please review the information below to learn more about eligibility, approved uses, contributions and benefits.

Introduction

On August 9, 2019 Oregon Governor Kate Brown signed the Paid Family and Medical Leave Act which entitles eligible employees up to 12 weeks of paid leave. The timeline of contributions, notice requirements, and benefit application is below.

• On or before September 1, 2021: The Employment Department will issue rules governing administration of the FAMLI Program.
• January 1, 2022: Employee payroll contributions begin.
• January 1, 2022: Employers must provide written notice to employees of their rights under the FAMLI Program.
• January 1, 2023: Employees are eligible to apply for paid sick leave benefits

Employer Coverage

All employers are covered under this ordinance except for federal or tribal government. 

Employee Coverage

In order to be eligible for Paid Family and Medical Leave benefits, an employee must have earned at least $1,000 in wages during the base year; or if an employee has not earned at least $1,000 in wages during the base year, an employee who has earned at least $1,000 in wages during the alternate base year.

Approved Uses

An employee can use paid leave benefits for the purposes of family leave, medical leave, or safe leave.  An employee may also qualify for an additional two weeks of benefits for limitations related to pregnancy, childbirth or a related medical condition, including lactation.

Contributions

Funding for the FAMLI Program will be provided through a payroll tax, the rate to be determined by the Director of the Employment Department (not to exceed 1% of the employee’s wages). The law provides that:

• Employers will contribute 40% of the total rate set by the director, while deducting the remaining 60% from each employee’s wages. Employers may pay the employee’s portion as an employer-offered benefit.
• Employers with fewer than 25 employees are exempt from paying the employer portion of the contribution. However, such employers who elect to pay into the program will be eligible for grants to help cover the cost of replacement workers. Regardless of whether such an employer elects to contribute, its eligible employees still will be assessed the employee contribution and be eligible for paid family leave benefits.

Self-employed individuals and tribal government employers can opt into the program and make contributions at the same rate as other employers.

Benefits

The new law requires employers to provide their workers with a maximum of 12 weeks of paid leave, with total paid and unpaid leave capped at 16 weeks (or up to 18 weeks for women who experience complications due to pregnancy or childbirth).

Benefits will be provided as follows:

• An employee’s weekly benefit amount is capped at 120% of state average weekly wage (approximately $1,254) with a floor of 5% (approximately $50).
• Employees who earn less than 65% of the state average weekly wage (approximately $679) will receive 100% of their average weekly wage.
• Employees who earn more than 65% of the state average weekly wage will receive 65% of the state average weekly wage plus 50% of the amount by which the employee’s average weekly wage exceeds the state average weekly wage.
• Additionally, employees may use vacation or sick time to supplement their weekly benefit amount, up to 100% of their wages.

Notice Requirements

An employer shall provide written notice to each employee of their rights and duties in accordance with rules adopted by the Director of the Employment Department.

Next Steps

Paylocity is monitoring this ordinance and will provide updates as the effective dates approach.  Below is a link for the agency’s draft regulations.

Click here for more information.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner.

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.

Date Posted: August 20, 2019