Does Oregon Have State Disability or Paid Leave?

Oregon does not offer state disability insurance in the way California or New York do, but the state does have two programs that together cover most workers who cannot work because of illness or injury. Paid Leave Oregon pays partial wages for up to 12 weeks when you have a serious health condition of your own. Oregon’s workers’ compensation system pays wage replacement and medical costs when the condition is work-related. Which program applies depends on how you got sick or hurt, not on which one you’d prefer.

Paid Leave Oregon for a Serious Health Condition

Paid Leave Oregon, established under ORS Chapter 657B, pays medical leave benefits when you need time off for your own serious health condition. That includes surgery recovery, chronic illness flare-ups, inpatient care, and mental health conditions that keep you from doing your job. To qualify, you must have earned at least $1,000 in wages during your base year or alternate base year.¹

How much you get depends on how your average weekly wage compares to the statewide average. For 2026, the state average weekly wage used for Paid Leave Oregon is $1,363.80. If your average weekly wage is at or below 65% of that figure (roughly $886), you receive 100% of your wages. Higher earners get a blended percentage, and the benefit tops out at 120% of the state average weekly wage, which works out to about $1,637 per week for the benefit year running through June 2026.¹

Benefits run for up to 12 weeks within a 52-week benefit year. If you experience pregnancy or childbirth complications, you may qualify for an additional two weeks, up to 14.² There’s no unpaid waiting week, so benefits can start with your first eligible week of leave.³

Some employers cover their workers through an equivalent plan approved by the Oregon Employment Department instead of the state fund. If that’s your situation, you’ll file with the plan rather than through Frances Online, and the plan must provide benefits at least as generous as the state program.⁴

Workers’ Compensation for On-the-Job Injuries

If your condition came from work, workers’ compensation under ORS Chapter 656 is the program that pays. Your work activity must be the “major contributing cause” of the injury or illness, which means you’ll need medical evidence linking the condition to your job.⁵

When you can’t work at all during recovery, temporary total disability replaces two-thirds of your pre-injury wages. For injuries occurring between July 1, 2025, and June 30, 2026, the maximum weekly payment is $1,884.69, based on 133% of the state average weekly wage of $1,417.06.⁶ If you can return to lighter duties at reduced pay, temporary partial disability covers part of the difference. Permanent disability benefits apply when you have lasting limitations after reaching maximum medical improvement, following state-mandated schedules.

Can You Collect Both Programs at Once?

Not for wage replacement. Since July 1, 2024, the only workers’ compensation benefit that disqualifies you from Paid Leave Oregon is time-loss, meaning the workers’ comp payments that replace lost wages. Other workers’ comp benefits, like medical reimbursement or survivors’ benefits, don’t affect your Paid Leave Oregon eligibility.⁷

If your condition qualifies under both programs, you have to pick one wage-replacement stream. Workers’ comp pays two-thirds of wages with no fixed cap on weeks during recovery. Paid Leave Oregon may replace a higher percentage of wages for lower earners but stops at 12 weeks. Your earnings, the severity of the injury, and how long you expect to be out all factor into which one pays more.

Keeping Your Job and Health Insurance

Paid Leave Oregon protects your job if you’ve worked for the same employer for at least 90 consecutive days. Your employer must return you to the same position, or an equivalent one with the same pay and benefits, when your leave ends.⁸

Health insurance generally continues on the same terms as if you were still working, though you still owe your share of the premium. If you can’t pay while on leave, your employer may temporarily drop coverage and reinstate it when you return, or deduct the unpaid premiums from future paychecks at up to 10% per pay period.⁸

Coverage for Self-Employed Workers

Self-employed workers and independent contractors are not automatically covered by Paid Leave Oregon, but they can opt in. Your work must be in Oregon, and you must have earned at least $1,000 in Oregon net self-employment income in the previous tax year. You enroll through Frances Online using your federal and state tax returns.⁹

Opting in commits you to at least three years of contributions. For 2025–2026, the rate is 0.6% of your Oregon net self-employment income up to $184,500, paid quarterly.⁹

Filing a Claim

Paid Leave Oregon

Medical leave claims go through the Frances Online portal run by the Oregon Employment Department. You’ll need your Social Security Number or ITIN, contact information, and employment details from the past 18 months, including employer names and wages.¹⁰

Your healthcare provider has to complete one of the accepted verification forms: the Paid Leave Oregon Verification of Serious Health Condition form, the Oregon and Federal Family and Medical Leave Health Care Provider Certification, or the federal FMLA certification.¹⁰ Make sure the dates on the medical documentation match the dates you’re claiming. Mismatches are one of the most common reasons claims stall. Approved benefits arrive by direct deposit or a state-issued debit card.

Workers’ Compensation

Report a work injury to your employer within 90 days of the accident. Your employer should give you Form 801 to formally file. Once you submit the form, your employer has five days to forward it to their workers’ compensation insurer.¹¹ File early. Delays make it harder to establish the injury as work-related.

Appealing a Denial

If Paid Leave Oregon denies your claim, you have 60 calendar days from the date of the decision to appeal. You can appeal through Frances Online or by mailing a Request a Hearing Form to the Oregon Employment Department. Don’t send it directly to the Office of Administrative Hearings; Paid Leave Oregon staff have to forward it. If the agency doesn’t reverse the denial, an administrative law judge holds a telephone hearing.¹²

For workers’ compensation, you request reconsideration from the Workers’ Compensation Division within 60 days of the mailing date on the Notice of Closure. If reconsideration doesn’t fix it, either side can request a formal hearing within 30 days of the Order on Reconsideration.¹³ These deadlines are strict. Missing one can permanently close your ability to challenge the decision.

How Paid Leave Benefits Are Taxed

Federal tax treatment of Paid Leave Oregon medical benefits is unsettled. IRS Revenue Ruling 2025-4 classified the employer-funded portion of medical leave benefits as third-party sick pay, subject to federal income tax withholding and reportable on a W-2. The Oregon Employment Department disagrees and has reported the taxable portion on Form 1099-MISC since the program started paying benefits in 2023.

How much of your benefit is federally taxable tracks how much of the contribution came from your employer. If you worked for a large employer that paid 40% of the contribution, roughly 40% of your medical leave benefit would be the taxable portion. If you worked for a small employer that paid no employer share, the taxable portion may be zero. Keep every tax form you receive from Paid Leave Oregon, and check with a tax professional before you file.

1
Oregon State Legislature. Oregon Revised Statute Chapter 657B – Family and Medical Leave Insurance
2
Paid Leave Oregon. Paid Leave Oregon Home
3
Paid Leave Oregon. Common Questions
4
Paid Leave Oregon. Equivalent Plans
5
Oregon State Legislature. Oregon Revised Statutes 656.005 – Definitions
6
Department of Consumer and Business Services. Bulletin No. 111 – Computation of Temporary Disability, Permanent Disability, and Death Benefits
7
Paid Leave Oregon. June 2024 Bulletin
8
State of Oregon: BOLI. Paid Leave Oregon Protections
9
Paid Leave Oregon. Self-Employed and Independent Contractors
10
Paid Leave Oregon. What You Need to Apply for Benefits Checklist
11
Oregon State Legislature. Oregon Revised Statute Chapter 656
12
Paid Leave Oregon. Appeals
13
Oregon Workers’ Compensation Division. Appealing a Closed Claim