Oregon PFML – Premium & Posting Requirements Begin 1/1/2023

Employers with workers in Oregon should start preparing for January 1, 2023, at which time they will be required to collect and remit premiums for Paid Leave Oregon, the state’s paid family and medical leave program (OR PFML). Employers are also required to post a model notice of the OR PFML program at each worksite or send via email or regular postal mail to remote workers by January 1, 2023. Employees can begin applying for OR PFML benefits on September 3, 2023.

OR PFML Background

OR PFML law was passed by the Oregon State Legislature in August 2019 and provides a state-administered income replacement program for Oregon workers to take time off of work for family leave, medical leave, and safe leave.

• Covered Employers & Employees: Most employers with at least one worker in Oregon are covered under OR PFML. All employees working in Oregon (including remote workers) who have earned at least $1,000 in the four out of the five quarters before starting leave (base year) are covered under OR PFML, including full-time, part-time, and seasonal employees.

  Self-employed individuals and independent contractors are not automatically covered under OR PFML but may choose to participate in the program by paying the required premium contributions to the state fund.

• Leave Types & Amounts: Employees will be able to take OR PFML for a total of 12 weeks for three different types of leave events outlined below. For certain pregnancy-related circumstances, employees may be able to take up 14 weeks.

  1. Family Leave: to care for a family member^[1] with a serious illness or injury or to bond with a child in the first year after birth, adoption, or foster care placement.

  2. Medical Leave: to care for oneself when dealing with a serious illness or injury.

  3. Safe Leave: to care for survivors of sexual assault, domestic violence, harassment, or stalking.

  Employees can take OR PFML on a continuous or intermittent basis in full workday increments.

• Benefits Effective Date: Employees can begin to apply for OR PFML benefits on September 3, 2023.

• Benefit Amount: An employee’s OR PFML benefit amount will be based on the wages an employee earned in the prior year. The maximum benefit amount an employee will receive will be 120% of the state average weekly wage^[2] up to a maximum of $1,469.78.

• Premium Contributions: Starting January 1, 2023, employees and employers must contribute to the Paid Leave Oregon state fund. The premium contribution rate for 2023 is 1% on up to $132,900 in wages^[3]. The employee portion is 0.6% of wages and the employer portion (see paragraph below) is 0.4% of wages. Employers may choose (but are not required) to pay the employee portion, full or in part, as a benefit for their employees.

  Employers with 25 or more employees nationally are required to contribute to the OR PFML program. Employers with fewer than 25 employees nationally are not required to contribute but these employers still must collect and remit their Oregon employees’ contributions to the program^[4].

  Example: An Oregon company has three employees working in Oregon, 21 employees working in Idaho, and four employees working in Arizona. Because the company has 25 or more employees, they are subject to the employer contribution of 40% of the contribution rate. However, they will only pay the employer contribution on the three employee’s wages that work in Oregon.

• Job Protection & Health Benefits Continuation: An employee’s job is protected when taking OR PFML if they worked for the same employers for 90 consecutive days, regardless of employer size. Employers are required to maintain an employee’s existing health benefits at the same employee contribution amount while taking OR PFML.

• Employee Notice: Employers may require employees to give notice when they will be taking leave, and to provide an explanation. For foreseeable leave events (such as a planned surgery or adopting a baby), employers may require employees to provide 30-day notice to their employers. For unforeseeable leave events (such as a premature birth or safe leave), employers may require employees to give oral notice within 24 hours and written notice within three days of starting leave. Employers must have a written policy outlining these employee notice requirements and provide to employees at the time of hire and each time the notice requirements change. ‎

• Equivalent Plan: Employers who prefer to provide paid leave benefits themselves may opt-out of collecting and remitting OR PFML premiums by applying for approval of an equivalent plan. The equivalent plan must cover all employees who have been continuously employed for at least 30 calendar days and offer benefits equal to or greater than the state program at the same employee contribution rate. The application fee for a new equivalent plan is $250.

Interaction with Other Leave

Employers cannot require employees to take sick leave, vacation leave, or other accrued leave prior to accessing OR PFML benefits. However, employees may choose to use their accrued paid leave time or protected sick leave under the Oregon Paid Sick Time Law before applying for OR PFML benefits.

If the qualifying reason for taking OR PFML benefits also ‎qualifies for unpaid leave under the Oregon Family Leave Act (OFLA) and/or federal Family and ‎Medical Leave Act (FMLA), the leaves will run ‎concurrently.‎

Model Notice Posting

The OR PFML model notice can be accessed here in 11 languages. Employers are required to post the notice in a conspicuous place at the worksite or mail/email it to remote workers in the language(s) generally used to communicate with employees.

Penalties for Non-Compliance

If an employer fails to file or complete all required reports or pay all required contributions prior to September 1 of each year, the Oregon Employment Department will assess a penalty equal to one percent of the employee wages in the previous calendar year.

Next Steps for Employers

1. Premium contributions: Confirm payroll processing practices with payroll vendors in advance of the January 1, 2023 effective date for collecting and remitting premiums to the Paid Leave Oregon state fund. Click here to register for Frances Online, the state’s employer reporting portal for OR PFML premium contributions and unemployment insurance.

2. Equivalent plan approval: Employers that choose to opt out of OR PFML premiums with an equivalent plan are required to apply for approval of the equivalent plan through Frances Online by November 30, 2022 to be exempt from paying first quarter contributions starting January 1, 2023. Click here for more information on applying for approval of an equivalent plan.

3. Model notice posting: Ensure the OR PFML model notice (accessed here) is posted in a conspicuous place at the worksite and sent to remote workers by January 1, 2023.

4. Leave policies: Revise employee leave policies in advance of the September 3, 2023 effective date to apply for OR PFML benefits, particularly with respect to employee notice requirements.

Risk Strategies is committed to keeping employers informed and up to date. Reach out to your Risk Strategies representative with questions or contact us at benefits@risk-strategies.com.

[1] Family members include spouses and domestic partners, children, parents, siblings or stepsiblings, grandparents, grandchildren, and any individual related by blood or affinity, whose relationship is equivalent to family.

[2] The Oregon Employment Department updates the average weekly wage each July.

[3] The rate and wage cap is determined by the Oregon Employment Department by November 15 each year.

[4] Small employers with fewer than 25 employees who commit to pay employer contributions for eight calendar quarters will be able to apply for assistance grants from the state under certain conditions to help offset the costs of employees taking OR PFML. Assistance grant applications are expected to be available starting September 2023.