Oregon sets contribution rate for new paid leave program

The Oregon Employment Department has officially set the rate that employers and employees will pay into the state’s new Paid Family Leave program starting in January.

The program will feature a fund that, starting in September 2023, will pay out benefits to Oregon workers who have to take time off to care for a sick family member or after a birth. It will also provide benefits for an employee who needs to take medical leave for their own serious health condition, or for an employee experiencing issues related to domestic violence, harassment, sexual assault, or stalking.

The benefit amount will depend on the employee’s average weekly wage. In some cases, it could be up to 100% of their lost wages.

The fund that provides the benefits will be paid for by Oregon workers and employers. The amount of those mandatory contributions is now set at a total of one percent of wages, with employees paying 60% of that amount and employers paying the remaining 40% of the amount.

“For example, if an employee made $1,000 in wages, the employee would pay $6 and the employer would pay $4 for this paycheck,” the Employment Department said in a press release.

Paid Family Leave director Karen Humelbaugh said the employees’ portion will be deducted directly from paychecks.

“The employer will be doing that paperwork for you, but people will begin to see that occurring starting in January,” she said.

Federal employees will not pay into the fund, nor can their receive benefits from the fund. People who are self-employed or who work for tribal governments can opt into the program.

Humelbaugh said it’s possible the rate could be adjusted downward in the future, depending on how much demand there is for benefits.

“We want to make sure that we set the rate appropriately to be sure that we have enough money in the fund to pay benefits as needed,” she said.

The program is required by law to have a six-month cushion of money for paying out benefits.