Oregon Paid Family Leave: Employer Cost and Duties
What Oregon paid family leave costs an employer, who pays the 1 percent contribution, what employees receive on leave, and every filing deadline.
The first time Oregon paid leave showed up on a payroll register I was looking at, it was a line item nobody on the team could explain. A small deduction on every paycheck, an employer amount next to it, and a general assumption that whoever set up payroll had it under control.
Nobody had it under control. The employer amount was being paid by a business that did not owe it, the model notice had never been posted, and the first leave request arrived before anyone had worked out who approves what. All three of those are easy to fix in advance and awkward to fix afterward.
This is the employer view of Paid Leave Oregon: what the contribution costs, which portion you actually owe, what an employee on leave receives and from whom, the duties that sit with you rather than with the state, and how the program lines up against federal leave.
I build the people and records tooling for businesses without an HR department at FirstHR, and FirstHR is an onboarding and HR platform rather than a payroll provider. This is general information, not legal advice.
What Paid Leave Oregon Is
Paid Leave Oregon is a state-run insurance program that pays partial wage replacement to employees on family, medical, or safe leave. The money comes out of a state fund built from payroll contributions, not out of your bank account at the moment somebody takes leave.
The last line of that definition is the one small employers misread most often. There is a size threshold in the program, but it governs who funds the employer share, not who participates. Your employees are covered from the first paycheck, whether yours is a very small business or a large one.
Separate the two halves of the program early. One half is a payroll tax question that lives with whoever runs your state payroll filings. The other is a leave administration question that lands on whoever answers a request for time off. They rarely sit with the same person at a small company, which is exactly why things fall through.
Who Pays the Contributions
Employees fund 60 percent of the total contribution, and employers averaging 25 or more employees fund the other 40 percent. The total is 1 percent of an employee’s gross wages for 2026. The contribution applies to wages up to $192,300 per employee from January 1, 2027 ($184,500 in 2026).
The wage cap follows the Social Security taxable wage base, which the Social Security Administration set at $192,300 for earnings in 2027. Once an employee’s cumulative wages cross the cap in a calendar year, both halves of the contribution stop for the rest of the year and start again in January.
| Annual wages | Employee share at 0.6% | Employer share at 0.4% | Total |
|---|---|---|---|
| $40,000 | $240 | $160 | $400 |
| $60,000 | $360 | $240 | $600 |
| $90,000 | $540 | $360 | $900 |
| $150,000 | $900 | $600 | $1,500 |
| $192,300 and above (2027 cap) | $1,153.80 | $769.20 | $1,923 |
The last row applies the 1 percent rate to the 2027 cap. The Oregon Employment Department posts each coming year’s rate by November 15, and the statute caps it at 1 percent, so that row is the 2027 ceiling per employee.
The employer column in that table is zero for an employer under the size threshold. For everyone else, 0.4 percent of covered payroll is the number to budget for. On a million dollars of covered wages that is $4,000 a year, small next to most benefit lines but large enough to notice if you had not planned for it.
Any employer may also elect to pay part or all of the employee 60 percent as an added benefit. Oregon law permits it explicitly, in ORS 657B.150.
Covering the employee share is an unusually cheap gesture at 0.6 percent of wages, and it shows up on every paycheck rather than in a benefits summary nobody reads. The full set of employer obligations is published by the state (Paid Leave Oregon).
The Small Employer Exemption
An employer averaging fewer than 25 employees does not pay the 40 percent employer contribution. That is the entire exemption. Every other duty in the program still applies, and the employees are covered exactly as they would be at a larger business.
Oregon also offers small employers something genuinely useful: assistance grants for covering an employee on approved leave. Paid Leave Oregon provides up to $3,000 toward the cost of a temporary replacement worker, or up to $1,000 toward significant additional wage-related costs such as overtime for existing staff or training.
Check the grant limits before you plan around one. A small employer can qualify for up to 10 grants in a year, and a grant is not a loan (Paid Leave Oregon).
A grant has to be repaid only in two cases, both within three years of receiving it: amended wage reports show you were a large employer when the leave began, or the application proves inaccurate and you did not qualify for the grant (Or. Admin. Code 471-070-3850).
There is a condition attached, and it is the one to weigh carefully. Taking a grant commits you to paying the employer contribution for eight calendar quarters afterward. On a modest payroll that is a real trade to model rather than a formality, and the details are set out by the state (Paid Leave Oregon small employer guidance).
What an Employee Receives
Eligible employees get up to 12 weeks of benefits in a 52-week benefit year, plus up to two more weeks for limitations related to pregnancy, childbirth, or a related medical condition. The state pays the benefit directly to the employee, so it never touches your payroll run.
The wage replacement runs on a two-tier formula anchored to the state average weekly wage. The Oregon Employment Department set that figure at $1,410.13 for calendar year 2025, and it governs benefit years beginning on or after June 28, 2026. Employees at or below 65 percent of it, roughly $916.58 a week, receive 100 percent of their average weekly pay.
Above that point the formula shifts. The benefit becomes 65 percent of the state average weekly wage plus half of whatever the employee earns above the threshold, subject to the weekly maximum. In practice that means lower-paid employees are made close to whole and higher-paid employees are not.
| Employee average weekly wage | Approximate weekly benefit | Effective replacement |
|---|---|---|
| $700 | $700 | 100 percent |
| $900 | $900 | 100 percent |
| $1,200 | About $1,058 | Around 88 percent |
| $2,000 | About $1,458 | Around 73 percent |
| $3,000 | $1,692.16 (capped) | Around 56 percent |
The table figures are calculated from the Oregon Employment Department state average weekly wage announcement of May 29, 2026. Employees whose benefit year began earlier stay on the prior maximum of $1,636.56 and the prior minimum of $68.19 for the rest of that year. That is why two people on your team can quote different numbers at each other.
Employees may also use accrued paid time off alongside the state benefit, up to 100 percent of their normal wages. Whether to use it is their call, but you may set the order in which accrued balances are drawn, so settle that against your existing leave policies before the first request arrives.
Who Qualifies
An employee qualifies by having earned at least $1,000 in Oregon in their base year before applying, and by having a qualifying reason. There is no minimum tenure with you, no hours threshold, and no employer size requirement.
That is a meaningfully lower bar than federal leave. Somebody who started with you six weeks ago, with earnings from a previous Oregon job, can be eligible for state benefits while being nowhere near eligible under the federal statute.
| Qualifying category | What it covers | Notes for the employer |
|---|---|---|
| Family leave | Bonding with a new child in the first year after birth, adoption, or foster placement, and caring for a family member with a serious health condition | The definition of family member is broader than the federal one and includes an individual related by blood or affinity |
| Medical leave | The employee’s own serious health condition | Includes pregnancy and childbirth recovery, which is where the two extra weeks can apply |
| Safe leave | Survivors of domestic violence, sexual assault, harassment, stalking, or bias crimes | Handle these requests with tighter confidentiality than a routine absence |
Job protection is the one place tenure matters. An employee who has worked for you at least 90 consecutive days is entitled to return to the same position. Below that, the benefit is still payable and the anti-retaliation protection still applies, but the restoration right has not attached yet.
Employers averaging 25 or more employees carry an extra restoration duty: if the original position no longer exists, they must offer an available equivalent position with the same pay and benefits within 50 miles. Smaller employers may offer a role with similar duties instead, at the same pay and benefits (Oregon Bureau of Labor and Industries).
What You Have to Do
Your duties fall into two buckets: the payroll mechanics that repeat every quarter, and the leave handling that only matters when somebody applies. Both are on you, and neither is delegated to the state.
The posting duty is the one most often missed, because it feels like paperwork rather than compliance. The state publishes the model notice; it goes up at each work site where employees can see it, and remote workers receive a copy directly. If you already keep a wall of required employee notices, this is one more item on it, not a new project.
The response window on a claim is where busy owners get caught. Oregon’s benefit rules give you 10 calendar days from the date on the department’s notice to report that the employee did not give you the leave notice the program requires (Or. Admin. Code 471-070-1310).
Missing that window costs you your say in the claim. An application with no employer reply is processed on the information the state already holds, so choosing electronic notification in the state system rather than paper is the cheapest protection available.
Dwight SchruteSales3 people
Darryl PhilbinWarehouse1 person
Kelly KapoorCustomer Service1 personThe Equivalent Plan Option
Oregon lets an employer opt out of the state program by running an approved equivalent plan instead. The plan must cover all employees and provide benefits and leave duration at least equal to the state program, and it needs approval from the Oregon Employment Department before it replaces anything.
Two forms exist. An employer-administered plan means you carry the financial risk of paying benefits yourself. A fully insured plan means an insurance carrier does, and you pay premiums.
The fees are the part employers underestimate. A new application costs a nonrefundable $250 and a reapproval costs $150. Decisions generally come back in about 30 days, and an employer has to reapply every year for the plan’s first three years and again whenever the plan changes (Paid Leave Oregon equivalent plans).
For most small employers the state program is the better answer, and the equivalent plan is a question worth asking only if you were already carrying a comparable paid leave benefit.
How It Stacks With FMLA
Paid Leave Oregon runs concurrently with the federal Family and Medical Leave Act (FMLA) when the same absence qualifies under both. An employee does not get 12 weeks of state leave and then 12 weeks of federal leave; they get one absence with two sets of protections attached.
The Oregon Family Leave Act (OFLA), which applies only to employers with 25 or more employees in Oregon, is the part that changed.
Since July 1, 2024, OFLA covers sick child leave (including illnesses that are not serious health conditions), bereavement, and pregnancy disability. Its leave sits on top of the paid program rather than running at the same time, even when one event qualifies for both (Oregon Bureau of Labor and Industries).
Federal leave is the exception to that split. Both Oregon statutes still run concurrently with FMLA where the same event qualifies under them (ORS 657B.025 and ORS 659A.186), so one absence can draw down a state entitlement and the federal one at the same time.
| Paid Leave Oregon | Federal FMLA | |
|---|---|---|
| Paid or unpaid | Paid by the state | Unpaid |
| Employer coverage | Nearly all employers with an employee in Oregon | 50 or more employees in 20 or more workweeks this year or last |
| Employee eligibility | $1,000 earned in the base year | 12 months of service, 1,250 hours in the 12 months before leave, and 50 employees within 75 miles of the worksite |
| Duration | 12 weeks, or 14 with the pregnancy extension | 12 weeks in a 12-month period |
| Job protection | After at least 90 consecutive days of service | From the point eligibility is met |
| Who administers the claim | Oregon Employment Department | The employer |
The practical consequence is that you designate leave under both regimes at once and count it once. Federal eligibility rules and the employer coverage threshold are set out by the Department of Labor (Wage and Hour Division).
If you have employees in more than one state, treat Oregon as one entry in a broader map rather than the model for everything. The state paid family leave programs differ enough on rates, duration, and employer duties that a policy written for one of them will be wrong somewhere else.
Every Deadline in One Place
Most of the program runs on four quarterly dates and one response window. Miss a quarterly date and you owe interest and penalties; miss the response window and the decision gets made without your input.
| What | When | Who it falls on |
|---|---|---|
| Withhold the employee contribution | Every pay period | Employer |
| Q1 report and payment | April 30 | Employer |
| Q2 report and payment | July 31 | Employer |
| Q3 report and payment | October 31 | Employer |
| Q4 report and payment | January 31 | Employer |
| Respond to a claim notification | Within 10 calendar days of the date on the notice | Employer |
| Notice of foreseeable leave | At least 30 days in advance, in writing if you require it | Employee |
| Notice of unexpected leave | Within 24 hours, with written notice inside 3 days | Employee |
| Assistance grant application | After the leave is approved, and before the end of the fourth month after it ends | Small employer |
Quarterly reports and payments are due the last day of the month following the quarter, and the deadline moves to the next business day when it falls on a weekend or holiday. Everything goes through the state payroll reporting system, with payment through the state revenue portal.
Write the employee-side notice deadlines into your handbook, because the form they take is yours to set. The 30 day timeline for foreseeable leave applies either way. You only get it in writing, with an explanation of the need, if your written policy asks for both and your employees have a copy.
A deadline with no name against it is the one that gets missed. The record below puts a name on each of them: the payroll settings that go stale every January, the posting, the four quarterly filings, and then a section you fill in again for every claim, where the 10 calendar days are counted from the date on the notice rather than the day it turned up.
Where Employers Get This Wrong
Five patterns account for almost everything I have seen go sideways, and the first is the most expensive.
Paying the employer contribution when you do not owe it comes first. Payroll systems default to charging both halves, and a business under the size threshold can spend a year quietly funding 0.4 percent of payroll it was exempt from. Check the setting rather than the invoice total.
Failing to withhold the employee share is second, and it turns expensive once the quarter closes. Until then you may deduct a missed amount from the employee’s later pay. After that, the state treats you as having elected to pay it, so the miss becomes your cost rather than a debt the employee owes (Or. Admin. Code 471-070-3040).
Assuming small employers are outside the program is third. The exemption covers one contribution line, not coverage, not reporting, and not job restoration.
Treating a benefit approval as a leave approval is fourth. The state decides whether to pay benefits. You still handle the leave of absence itself: the coverage plan, the return date, the concurrent federal designation, and the paperwork that goes with all three.
And letting the claim response window pass is last. It runs for 10 calendar days from the date on the state’s notice, and the quiet consequence of a missed reply is that the claim is processed on the state’s records alone.
Nick Anisimov, FirstHR founderPaid Leave Oregon is a mandatory program, but it is also a real benefit that many of your employees do not know they have, and explaining it costs you nothing. Set against the wider set of statutory benefits you already fund without credit, this one is unusually easy to get recognition for.
Getting Set Up Correctly
Seven steps cover the whole program, and most of them are one-time settings rather than ongoing work.
Frequently Asked Questions
How much does Paid Leave Oregon cost an employer?
An employer averaging 25 or more employees pays 0.4 percent of each employee’s covered wages, and an employer below that average pays no employer contribution at all. The 0.4 percent is the employer’s 40 percent of the 1 percent total contribution set for 2026. Employees fund the other 60 percent (0.6 percent of wages) through payroll withholding, which every employer still collects and remits, small ones included. Covered wages stop at the Social Security wage base: $192,300 starting January 1, 2027, compared with $184,500 in 2026. At that 2027 cap and a 1 percent rate, the employer share tops out at $769.20 per employee for the year and the employee share at $1,153.80. Oregon sets each year’s rate by the preceding November 15 and never lets it exceed 1 percent. An employer can also choose to cover some or all of the employee share as a benefit.
Do small employers have to pay into Paid Leave Oregon?
No, not the employer portion. Employers averaging fewer than 25 employees are exempt from the 40 percent employer contribution. They are not exempt from anything else: they still withhold the employee share from every paycheck, file the combined quarterly report, remit the money on schedule, post the model notice, and restore employees to their jobs after leave. Their employees are fully covered and can claim benefits exactly like anyone else. The one way a small employer picks up the employer contribution is by accepting an assistance grant, which carries a commitment to pay it for eight calendar quarters afterward.
How much does an employee get paid on Oregon paid leave?
The benefit is a two-tier formula built on Oregon’s state average weekly wage of $1,410.13, the calendar year 2025 figure that applies to benefit years starting June 28, 2026 or later. An employee whose average weekly wage is at or below 65 percent of that figure receives 100 percent of their weekly pay. Above that point, the benefit is 65 percent of the state average weekly wage plus half of the employee’s earnings above the threshold. The result is capped at $1,692.16 per week and floored at $70.51 per week for benefit years starting on or after that date. Benefits come from the state, not from your payroll.
How many weeks of paid leave does Oregon give?
Up to 12 weeks in each 52-week benefit year. An employee whose pregnancy, childbirth, or related medical condition limits them can add up to two more weeks, for a maximum of 14. The 12 weeks cover all three qualifying categories together rather than 12 weeks each: family leave for bonding with a new child or caring for a family member with a serious health condition, medical leave for the employee’s own serious health condition, and safe leave for survivors of domestic violence, sexual assault, harassment, stalking, or bias crimes. Leave can be taken continuously or intermittently, which is where scheduling gets complicated for a small team.
Does Paid Leave Oregon run at the same time as FMLA?
Yes. Where one absence qualifies under both, Paid Leave Oregon and the federal Family and Medical Leave Act (FMLA) run concurrently, so the employee is not entitled to 12 weeks under each. The Oregon Family Leave Act (OFLA) works differently. Since July 1, 2024, OFLA leave has come in addition to Paid Leave Oregon and cannot be taken at the same time, even for an event that would qualify under both. OFLA now covers sick child leave, bereavement, and pregnancy disability, but only for employers with at least 25 employees in Oregon, so at those employers its weeks can stack on top of the paid program’s. Both state programs still run concurrently with FMLA when the same event qualifies.
Can an employer use its own plan instead?
Yes, through an approved equivalent plan. The plan can be employer-administered or fully insured, and it must be open to all employees. Its benefits and leave duration have to match or beat the state program, and it cannot take more out of employees’ pay than the state would. Applications go to the Oregon Employment Department, which generally decides within about 30 days. A new application costs $250, which is nonrefundable, and a reapproval costs $150. The employer has to reapply annually for the plan’s first three years, and again after any change to the plan. For most small employers the numbers do not work, but they can for an employer already carrying a generous paid leave benefit.
What happens if an employee does not give notice before taking leave?
The state can reduce their first weekly benefit payment by 25 percent, but that is a consequence for the employee rather than a reason for you to deny the leave. You may require written notice at least 30 days before foreseeable family, medical, or safe leave, and you may require an explanation of the need. For an unexpected event the employee must tell you within 24 hours of starting leave and give written notice within three days. Put the notice requirement in writing before you need it, because a requirement that was never communicated is difficult to enforce after the fact.
Do employees keep their job and health insurance during leave?
Yes on both counts, with one condition on the job: the employee needs at least 90 consecutive days of service with you to have the right to come back to the same position. If that position no longer exists, an employer averaging 25 or more employees must offer an available equivalent one with the same pay and benefits, located within 50 miles. A smaller employer may instead place the employee in a different job with similar duties, at the same pay and benefits. Health coverage carries on throughout the leave on the same terms as before, and the employee keeps paying their usual premium share. Retaliating against anyone for asking about or applying for benefits is prohibited, whatever their length of service.
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