Oregon (OR) is the most recent state expected to finalize rules which will add to the patchwork of state paid leave laws that continue to challenge employers.
The final rules for the state’s paid family and medical leave insurance program (PFMLI), known as Paid Leave Oregon (PLO), are expected to be finalized in September of 2022.
What is it? PLO is a new program funded by payroll taxes that provides both job protection and paid leave.
- Job protection is required for employees who have worked 90 days for their employer just prior to taking PLO leave.
- Employees are eligible for benefits if they have been paid $1,000 in wages during the 12 months prior to the start of the leave.
- Employers with more than 25 employees must also continue health benefits during leave with the same cost share as if not on leave.
Who must comply? All employers with employees performing work in OR must pay the tax on behalf of OR workers.
Who pays for it?
Employers with 25 or more employees, counting employees in OR and outside of OR: employers pay 40% and employees pay 60% of the contribution rates, which is 1 percent for 2023. There is a cap of 0.6% of a person’s gross wages.
Employers with fewer than 25 employees, counting employees in OR and outside of OR: funded with employee contributions only; however, employers may voluntarily choose to pay their portion of the tax (40%) which enables them to be eligible to receive limited assistance grants to help with the costs of hiring replacement workers or other significant wage-related costs. For more information for employers with fewer than 25 employees, click here.
When do payroll taxes start? January 1, 2023
When can an employee start using paid leave under the program? September 3, 2023 with applications starting September 1, 2023.
What is the amount of leave? A covered employee may qualify for up to 12 weeks of PLO benefit during a 12-month benefit year, plus an additional two weeks for pregnancy-related disability. The benefit year coincides with the starting date of the leave.
- Amount of benefit: The benefit amount is based on OR’s average weekly wage compared to the worker’s average wage in the previous year. The maximum weekly benefit in 2023 will be approximately $1375. Additional details on the plan benefits can be found here.
Next steps for employers:
Employers with employees working in Oregon should familiarize themselves with the program now, including information necessary to obtain approval to opt out if your company is already offering or plans to offer an equivalent paid leave benefit. Learn more about the application process here.
An employer is responsible for posting a notice for employees regarding PLO. For more information, visit the employer section of the PLO website.
Contact your payroll company to ensure your company begins collecting and paying the PLO payroll tax beginning January 1, 2023.
Contact your Bolton employee benefits team if you would like assistance exploring the opt out options for PLO. Additional details about Paid Leave Oregon can be found on the Oregon Employment Department’s website.
We will continue to monitor regulator guidance and offer meaningful, practical, timely information.
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.
