Every Oregon employer must participate in Paid Leave Oregon, and the core requirements for employers under Oregon paid family leave are the same across the state: withhold the 0.6% employee contribution from each paycheck, report wages and remit contributions quarterly through Frances Online, post the official program notice, protect the employee’s job during qualifying leave, continue health benefits, and avoid retaliation. Employers that average 25 or more employees also owe a 0.4% employer contribution on covered wages. The total contribution rate for 2026 is 1% of gross wages up to $184,500 per employee.
Large Employer or Small Employer
Headcount decides whether you owe the employer share. Large employers average 25 or more employees per pay period across the prior four calendar quarters. Small employers fall below that line. Everyone on the payroll counts, including workers performing duties outside Oregon.
Both groups participate. The split is financial: large employers pay the 0.4% employer contribution, while small employers do not, unless they have received a small employer assistance grant within the previous two years. Small employers still have to withhold and remit the employee portion from every paycheck.1Paid Leave Oregon. Paid Leave Oregon Employers Overview
Contribution Rates and the 2026 Wage Cap
The 2026 total contribution rate is 1% of each employee’s gross wages.2Paid Leave Oregon. Common Questions – Paid Leave Oregon By statute, the rate can never exceed 1%, and the Oregon Employment Department sets the exact figure annually based on the trust fund’s balance.3Oregon Public Law. Oregon Code 657B.150 – Contributions, Director to Set Rates
The 1% splits 60/40. Employees pay 0.6% of gross wages, withheld from each paycheck. Large employers pay 0.4% from business funds. Contributions apply only to wages up to the Social Security wage base, which is $184,500 for 2026; anything above that cap is not subject to the contribution.4Paid Leave Oregon. Contributions Calculator – Paid Leave Oregon “Wages” covers salaries, bonuses, commissions, and the cash value of non-cash compensation. Withholding begins when the employee starts performing services in Oregon.
An employer may choose to cover the employee’s 0.6% share. Under IRS Revenue Ruling 2025-4, that pick-up counts as additional compensation to the employee, must appear on the employee’s W-2, and is subject to federal income and employment taxes. The employer may deduct the pick-up amount as a business expense.5Internal Revenue Service. Revenue Ruling 2025-4
Quarterly Reporting Through Frances Online
Employers report wages and remit contributions through Frances Online using the Oregon Quarterly Tax Report (Form OQ).6State of Oregon. Tax Forms and Reports Form OQ handles Paid Leave Oregon alongside state income tax withholding, unemployment insurance, and other state payroll obligations. The report is due by the last day of the month following each calendar quarter. Late filings can trigger interest and penalties.
Required Workplace Notice
Every employer must display the official Paid Leave Oregon notice poster in each building or worksite, in a spot employees regularly access. The poster must appear in every language the employer normally uses to communicate with staff at that location.7Legal Information Institute. Oregon Administrative Code 471-070-1300 – Benefits Written Notice Poster to Employees of Rights and Duties
Remote workers get the notice individually, delivered by hand, by mail, or electronically, at hire or when first assigned to remote work. Employers with an approved equivalent plan follow separate notice rules under OAR 471-070-2330.
Notice an Employee Must Give Before Leave
For foreseeable leave, you may require at least 30 days’ written notice before the leave starts, with an explanation of the need. For unforeseeable leave, the employee (or someone on their behalf) must give oral notice within 24 hours and follow up in writing within three days.8Oregon State Legislature. Oregon Code 657B – Family and Medical Leave Insurance
If an employee skips the required notice, the Employment Department director may reduce their first weekly benefit payment by up to 25%. The employer is responsible for notifying the director that notice was missed. Safe leave is held to a lower bar: the employee gives “reasonable advance notice” unless doing so is not feasible.
Job Protection on Return
Job protection kicks in once an employee has worked for the employer at least 90 consecutive days before taking leave.9Oregon Public Law. Oregon Code 657B.060 – Job Protection, Benefits After returning, the employee is entitled to the original position if it still exists, even if a temporary replacement filled it during the absence. If the position has been eliminated, the employer must offer an equivalent role with equivalent pay, benefits, and employment terms.
If no equivalent position exists at the original worksite, the employer must offer one at any job site within 50 miles, if available. When equivalent positions exist at more than one location, the one closest to the original site must be offered first.9Oregon Public Law. Oregon Code 657B.060 – Job Protection, Benefits
Small employers get some flexibility. If the returning employee’s position no longer exists, a small employer may, based on business necessity, restore the worker to a different role with similar duties and the same pay and benefits rather than hunt for an exact equivalent.
Health Benefits Continue During Leave
Employers must keep an employee’s health insurance in place for the full duration of leave on the same terms as if the employee were still actively working. The employee stays responsible for their usual share of premium costs.8Oregon State Legislature. Oregon Code 657B – Family and Medical Leave Insurance In practice, the employer keeps paying its portion of premiums without interruption and arranges with the employee to collect the employee’s share during leave or upon return.
Anti-Retaliation Rules
Oregon law bars employers from retaliating or discriminating against any employee who asks about, applies for, or takes Paid Leave. This protection applies from the first day of employment; there is no 90-day waiting period for anti-retaliation coverage, even though job restoration requires 90 days of service.10Oregon Bureau of Labor and Industries. Paid Leave Oregon Protections
Retaliation includes treating a leave-taking employee differently from similarly situated colleagues, imposing discipline beyond what the statute allows for notice violations, or withholding a bonus the employee would otherwise have earned. Even a denied claim is protected activity. The Bureau of Labor and Industries investigates complaints about job protection, retaliation, and discrimination.
Running an Equivalent Plan Instead
Rather than contributing to the state fund, an employer may apply for approval of a private equivalent plan. The plan must provide every benefit, right, and protection the state program offers, with matching leave duration and benefit amounts.11Oregon Public Law. Oregon Code 657B.210 – Equivalent Plans, Generally, Rules, Fee
The application goes to the Employment Department director with a fee of up to $250. Once approved, neither the employer nor employees contribute to the state fund for the plan’s duration. Equivalent plans can be fully insured through a private carrier or self-insured with a surety bond; self-insured employers need to show financial capacity to cover potential claims.
The state reviews approved plans periodically. Penalty tiers are specific: $1,000 for a first violation of equivalent plan requirements and $2,000 for each subsequent violation. The director may waive a first-time penalty if the employer corrects the problem within 30 days and the error was inadvertent.12Oregon Public Law. Oregon Code 657B.925 – Penalties for Employer Violation of Requirements
Small Employer Assistance Grants
Small employers can apply through Frances Online for an assistance grant when an employee goes on paid leave. The grants help cover costs like hiring a temporary replacement or other wage-related expenses tied to the absence.13Paid Leave Oregon. Small Employers – Paid Leave Oregon
There is a trade-off. Once a grant is approved, the small employer must begin paying the 40% employer contribution (normally skipped at that size) for eight consecutive quarters. That two-year obligation starts after the grant is received, so the math only works if the grant exceeds the added contribution cost.
Running Paid Leave Alongside FMLA and OFLA
When an employee qualifies for Paid Leave Oregon and federal Family and Medical Leave Act leave for the same reason, the leaves run concurrently.14Paid Leave Oregon. April 2023 Bulletin – Paid Leave Oregon The same applies to the Oregon Family Leave Act. You cannot require an employee to exhaust one program before using another when the qualifying reason overlaps.
FMLA provides 12 weeks of unpaid, job-protected leave for eligible employees at employers with 50 or more workers. Paid Leave Oregon layers pay onto what would otherwise be unpaid FMLA time. Employers covered by both laws track leave under each program at the same time, because eligibility criteria and benefit periods differ. An employee might exhaust FMLA protection before Paid Leave Oregon benefits end, or the reverse. FMLA has its own notice and certification procedures, so Paid Leave Oregon paperwork does not satisfy federal requirements.15U.S. Department of Labor. FMLA Frequently Asked Questions
Federal Tax Treatment of the Contributions
IRS Revenue Ruling 2025-4 set the federal treatment of Paid Leave Oregon contributions for tax years beginning in 2025. The 0.6% withheld from employees is treated as a state income tax. It stays included in the employee’s gross income and W-2 wages for federal purposes. Employees who itemize may deduct the withholding under the state and local tax deduction, subject to the SALT cap.
The 0.4% paid by large employers is treated as a state excise tax. The employer deducts it as a business expense. It is not included in the employee’s gross income and does not appear on the W-2.5Internal Revenue Service. Revenue Ruling 2025-4 The distinction matters for payroll setup, because the two sides of the contribution post differently.
Recordkeeping
Employers with approved equivalent plans must retain records for six years from the plan’s effective date. The required records include quarterly tax reports, plan amendments, financial documents related to administration and claims, employee benefit applications with approval or denial status, dispute and appeal documentation, and records of leave taken and benefits paid or denied. The Employment Department may request these records for review at any time with reasonable notice.
For employers participating in the state fund rather than an equivalent plan, federal recordkeeping sets the baseline. Under FLSA requirements, payroll records must be kept for at least three years.16U.S. Equal Employment Opportunity Commission. Recordkeeping Requirements Keeping Paid Leave Oregon withholding records with standard payroll files for at least three years is a reasonable floor; longer retention is advisable given Oregon’s enforcement timeline.