Oregon Employment Termination for Employers: Final Pay, WARN Notice

Oregon employment termination requirements for employers center on one hard deadline and a set of rules that surround it: when you fire a worker, every earned wage must be paid by the end of the next business day, deductions from that final check are tightly limited, and missing the deadline triggers penalty wages that can run for 30 days. Around the paycheck sit further duties: lawful grounds for the termination itself, notices to the departing worker, and, for larger layoffs, advance notice to employees and government.

Final Paycheck Deadlines

Oregon’s rule under ORS 652.140 sets different deadlines depending on how the employment ended.¹

When the employer fires the worker or the parties agree mutually to end employment, all earned and unpaid wages are due by the end of the next business day.
When the employee quits with at least 48 hours’ notice (excluding weekends and holidays), the final check is due on the last day of work.
When the employee quits without that notice, payment is due within five business days or by the next regular payday, whichever comes first.

If a departing hourly or variable-schedule worker still owes time records, the employer must pay estimated wages within five days of the quit date and then true up any remaining balance within five days after receiving the actual records.¹ When the termination falls on a weekend or holiday, the deadline moves to the end of the next business day.

Delivery can happen at the regular workplace or by first-class mail to the employee’s last known address, so long as the envelope is postmarked within the required window.²

What the Final Check Must Include

The check must cover all earned and unpaid wages through the last day worked. That includes regular hourly or salary pay and any commissions or bonuses that have vested. Accrued vacation, PTO, and sick leave are payable only if the employer’s written policy or established practice promises a payout at separation. Oregon does not require vacation payout by default, so the obligation rises or falls on what the employer itself committed to.

Deductions You Can and Cannot Take

Under ORS 652.610, the deductions allowed from a final paycheck are narrow:³

Amounts required by law, such as federal and state income taxes, Social Security and Medicare, and court-ordered garnishments.
Voluntary deductions for the employee’s benefit, such as health insurance premiums, with the employee’s written authorization.
Third-party deductions like charitable contributions where the employer is not the ultimate recipient, authorized in writing by the employee.
Repayment of a cash loan from the employer, but only if the employee voluntarily signed a loan agreement and the loan was made solely for the employee’s personal benefit.

One trap catches employers repeatedly. Deductions for uniforms, tools, or other items required to do the job are prohibited outright, even with a signed authorization.⁴ Docking a departing worker’s pay for an unreturned uniform violates state law regardless of what the employee agreed to.

Penalty Wages for Late Payment

Under ORS 652.150, when an employer willfully fails to pay final wages on time, penalty wages accrue at the employee’s regular hourly rate for eight hours per day, starting from the date the paycheck was due. The penalty can run up to 30 days.⁵ At Oregon’s standard minimum wage of $15.05 per hour, that is $120.40 per day, and up to $3,612 in penalties alone.⁶

The statute also includes a written-notice mechanism. If the worker (or someone acting for them) sends written notice specifying the unpaid amount, the employer has 12 days to pay in full. Paying within that window caps the penalty at 100% of the unpaid wages. Without a written notice from the worker, the penalty is likewise capped at 100% of unpaid wages, but the 12-day safe harbor is not available.⁵

There is one narrow good-faith exception. If the employer paid estimated wages because time records had not been submitted, and then paid the balance within five days of receiving the records, no penalty applies.⁵ Workers can pursue penalty claims through a BOLI complaint or a private lawsuit.

Lawful Grounds for Termination

Oregon is an at-will state, so absent a contract or collective bargaining agreement, an employer can end employment for any lawful reason or no reason at all.⁷ The limits are what usually generate liability.

Under ORS 659A.030, an employer cannot fire someone because of race, color, religion, sex, sexual orientation, gender identity, national origin, marital status, age (18 or older), or an expunged juvenile record.⁸ Disability is covered separately under ORS 659A.112, which requires reasonable accommodation for qualified workers with physical or mental limitations unless doing so would impose an undue hardship.⁹ These state protections apply regardless of employer size, so small employers who assume Title VII’s 15-employee floor shields them are exposed under state law.¹⁰

Oregon courts also recognize a common-law wrongful discharge claim when an employer fires someone for reasons that violate an important public policy, such as exercising a legal right, performing a public duty like jury service, or reporting illegal conduct. Courts treat it as a gap-filler, typically available when no other statute already provides a remedy for the same conduct.

Damages in a state discrimination action under ORS 659A.885 include reinstatement, back pay for up to two years before the complaint was filed, compensatory damages, and punitive damages, with attorney fees available to the prevailing party. There is no statutory cap on compensatory or punitive awards.¹¹

Non-Compete Agreements After Termination

If you want a post-termination non-compete to hold up, ORS 653.295 requires every one of the following:¹²

Written notice of the non-compete requirement in the employment offer at least two weeks before the first day, or imposition on a genuine promotion.
Annual gross salary and commissions above $119,541 as of 2026, a figure that adjusts annually for inflation.¹³
A protectable interest, such as the employee’s access to trade secrets or competitively sensitive information like product development plans or sales strategies.
A signed copy of the non-compete terms delivered to the employee within 30 days after the last day of work.

Even when every box is checked, the restriction cannot exceed 12 months from termination. Anything longer is void.¹²

For employees below the income threshold, a non-compete can still be enforced if the employer commits in writing to pay “garden leave” during the restricted period equal to at least 50% of the employee’s annual base salary and commissions at termination, or 50% of the $119,541 threshold, whichever is greater.¹³ Without that written commitment, the agreement is unenforceable, which means most rank-and-file workers cannot be bound at all.

Mass Layoffs and WARN Notice

The federal WARN Act applies to employers with 100 or more employees, excluding part-time workers who average fewer than 20 hours a week and those with fewer than six months of tenure. Covered employers must give at least 60 calendar days’ written notice before a plant closing or a mass layoff affecting 50 or more workers at a single site.¹⁴

Notice goes to the affected employees, any union representatives, the local chief elected official, and the state dislocated worker unit. Exceptions exist for unforeseeable business circumstances, faltering companies actively seeking capital, and natural disasters, but employers who rely on them without solid documentation tend to lose in court.

Violating the notice requirement makes the employer liable for each affected worker’s back pay and benefits for the period of the violation, up to 60 days. A separate civil penalty of up to $500 per day applies for failing to notify local government, though the employer can avoid it by paying all employee claims within three weeks of the closing. Attorney fees can be awarded to prevailing employees.¹⁵

Notices Owed to the Departing Worker

Unemployment Insurance

ORS 657.260 requires employers to give departing employees printed materials explaining how to file for unemployment benefits with the Oregon Employment Department. The notice must be provided when the worker becomes unemployed, written in plain language, and must mention that workers who voluntarily quit or are fired for misconduct may face a waiting period or disqualification.¹⁶

Health Insurance Continuation

Employers with 20 or more employees fall under federal COBRA, which lets former employees keep the group health plan for 18 to 36 months depending on the qualifying event. Smaller employers (fewer than 20 workers) fall under Oregon’s state continuation program, which allows up to nine months of coverage after job loss or a reduction in hours, provided the employee had at least three months of continuous coverage before the qualifying event.¹⁷ The insurance contract usually requires the employer to notify the insurer when an employee becomes ineligible; the insurer then has 10 days to notify the employee of continuation rights. The former employee pays the full premium under either program.

Tax Paperwork After Separation

A departing employee is entitled to a Form W-2, due no later than January 31 of the following year. If the former employee submits a written request for an earlier W-2, the employer must provide it within 30 days.¹⁸

Severance pay and lump-sum payouts of accrued benefits are treated by the IRS as supplemental wages. The federal withholding rate on supplemental wages is 22% for amounts up to $1 million in a calendar year and 37% above that.¹⁹ Social Security tax applies to final wages up to the 2026 wage base of $184,500; Medicare has no cap.²⁰ The same payroll-tax penalties apply to a botched final-payment calculation as to any other withholding error.

1
Oregon Public Law. Oregon Code 652.140 – Payment of Wages on Termination of Employment
2
State of Oregon. Paychecks
3
Oregon Public Law. Oregon Code 652.610 – Itemized Statement of Amounts and Purposes of Deductions
4
State of Oregon. Paycheck Deductions
5
Oregon Public Law. Oregon Code 652.150 – Penalty Wage for Failure to Pay Wages on Termination of Employment
6
State of Oregon. Oregon Minimum Wage
7
State of Oregon. Employment at Will
8
Oregon Public Law. Oregon Code 659A.030 – Unlawful Employment Discrimination
9
Oregon Public Law. Oregon Code 659A.112 – Employment Discrimination
10
U.S. Equal Employment Opportunity Commission. Time Limits for Filing a Charge
11
Oregon Public Law. Oregon Code 659A.885 – Civil Action
12
Oregon Public Law. Oregon Code 653.295 – Noncompetition Agreements
13
State of Oregon. Noncompetition Agreements
14
U.S. Department of Labor. Plant Closings and Layoffs
15
U.S. Department of Labor. WARN Advisor
16
Oregon Public Law. Oregon Code 657.260 – Filing Claims for Benefits
17
Division of Financial Regulation. State Continuation
18
Internal Revenue Service. General Instructions for Forms W-2 and W-3
19
Internal Revenue Service. Publication 15, Employer’s Tax Guide
20
Internal Revenue Service. Social Security and Medicare Withholding Rates