Paid Leave in Oregon | Effective 2023.
The Oregon Employment Department [OED] has recently issued a press release (see below) outlining the details on the employee-employer tax contribution for the Oregon Paid Family Leave program.
Paid Leave Oregon is an insurance program for all Oregon employers and employees. The program is funded through payroll-based contributions made by both the employee and employer. Eligible employees will receive a weekly benefit payment, with the amount of the benefit payment dependent upon the employee’s average weekly wage. The program provides paid Family Leave for employees to:
- Take Family Leave to bond with a child during the first year after birth, adoption, or foster care placement.
- Take Family Leave to care for a family member who has a serious health condition.
- Take Medical Leave for an employee’s own serious health condition.
- Take Safe Leave for an employee experiencing issues related to domestic violence, harassment, sexual assault, or stalking.
- Medical conditions covered are similar to what is covered by the Oregon Family Leave Act (OFLA). As noted in the press release below, not only will longer term illnesses be covered but other specified situations will be as well. More details will be forthcoming.
OED Payroll Taxation Rates
The OED will be administering the PFMLI, and has recently provided a press release (below) detailing the upcoming tax rate on employees and employers. This contribution rate has been set at 1% of payroll, of which 60% (of that 1% of payroll) will be paid by employees and the remaining 40% paid by employers. The 1% rate can change annually, up or down. Please note that the press release does not clearly articulate that the taxes begin on January 1st, 2023, while employees cannot use paid leave until September 3rd, 2023.
Cardinal Services has been following these developments closely and are preparing to be able to administer this new program once all the rules are written. As with any new HR changes from the state, Cardinal will keep on top of them and be able to assist you with any new requirements. Please stay tuned and Cardinal will keep you updated as we learn more.
Contribution rate set for 2023
Paid Leave Oregon is setting the contribution rate for employers and workers at 1 percent when contributions begin in 2023.
Paid Leave Oregon will allow workers to take paid time off for some of life’s most important moments. It covers leave for the birth or adoption of a child, for serious illness or injury, for taking care of a seriously ill family member, and for supporting survivors of sexual assault, domestic violence, harassment or stalking.
Starting Jan. 1, 2023, workers will pay 60 percent and employers will pay 40 percent of the combined contribution rate of 1 percent. For example, if an employee made $1,000 in wages, the employee would pay $6 and the employer would pay $4 for this paycheck. Employers may choose to pay the employee portion as a benefit for their employees.
Paid leave contributions will go into a trust fund, which in turn, will provide the revenue for workers’ paid leave benefits starting Sept. 3, 2023. Oregon law says the Oregon Employment Department Director will set the paid leave contribution rate annually, which cannot exceed 1 percent. The law also requires the trust fund to have enough funds to pay benefits for up six months.
Paid Leave Oregon used actuarial data and to forecast that a 1 percent contribution rate would make sure the program would have enough funds to both meet the legal requirement and pay benefits for Oregon workers.
“Setting contributions at 1 percent means Paid Leave Oregon can offer lower-wage workers up to a 100 percent reimbursement rate when they need to take leave while ensuring there is enough money to support the program in the long term,” said Paid Leave Oregon Director Karen Madden Humelbaugh.
Paid Leave Oregon expects the contribution rate to decrease in the future as the fund becomes solvent.
More information about Paid Leave Oregon is online at oregon.gov/employ/PFMLI. There are a number of new resources on the website, including information about contributions, benefits, equivalent plans and a new program overview.