Oregon Passes Generous Paid Family and Medical Leave Act to Provide 12 Weeks Paid Leave Effective January 1, 2023

Oregon Governor Kate Brown recently signed into law HB 2005, known as the Family and Medical Leave Insurance Program (FAMLI), to approve paid family and medical leave benefits starting in 2023.  With the enactment of FAMLI, Oregon becomes the eighth state with a paid family and medical leave program.

New Law Provides Paid Leave Beginning 2023

Effective January 1, 2023 private employers with one or more employees within the state of Oregon will need to provide up to 12 weeks of paid leave within a 12-month period.   Leave many be taken for:

  • Birth and care of a newborn child,
  • Placement of an adopted or foster child with the employee,
  • To care for a family member (defined as any individual related by blood or whose relationship is the equivalent of a family relationship) with a serious health condition,
  • Employee’s own serious health condition, including incapacity due to pregnancy, or
  • Safe leave to deal with domestic violence, harassment, sexual assault or stalking for oneself or a minor child or dependent

Employees are also able to take up to 4 additional weeks of unpaid leave for any of the following reasons in the current Oregon Family Leave Act:

  • Birth and care of a newborn child,
  • Placement of an adopted or foster child with the employee,
  • Care of an immediate family member with a serious health condition,
  • Employee’s own serious health condition, including incapacity due to pregnancy,
  • Sick child leave to care for the employee’s child that requires home care but is not a serious health condition
  • Death of a family member (two weeks)
  • Any qualifying exigency
  • Donate a body part, organ or tissue (effective January 1, 2020)

The maximum amount of leave an employee may take under both FAMLI, and OR FLA is 16 weeks (12 weeks paid, and 4 weeks unpaid).  Pregnant employees may qualify for an additional two weeks of benefits for conditions relating to pregnancy, childbirth or a related medical condition, capped at 18 weeks (12 weeks paid and 6 weeks unpaid) per 12-month period.

To be eligible for leave, an employee must be employed with the employer and have paid into the fund described below.  As under the current OR Family Leave Act, when an employee takes paid leave under FAMLI, benefits are continued as if the employee is actively employed, and the employee should be reinstated to the same position.  Leave taken under Oregon FLA, and the new FAMLI program must be taken concurrently.

Does the OR Family and Medical Leave Insurance Program Coordinate with other Employer Provided Paid Leave?

FAMLI benefits are in addition to other paid leave earned by the employee.  The employer may permit the employee to use paid sick time, vacation leave or any other paid leave in addition to receiving paid family and medical leave insurance benefits to replace the employee’s wages up to 100% of salary.  Employees eligible for workers compensation or unemployment benefits are disqualified from receiving benefits under the FAMLI.

How Will the Paid Leave be Funded?

Effective January 1, 2022, employers will begin collecting a payroll tax not to exceed 1% of the employee’s pay and capped at the Social Security contribution and benefit base ($132,900 in 2019). The tax will be split between employees and employers, with the employer responsible for 40% of the tax, and employees responsible for the remaining 60%.  Employers with fewer than 25 employees working in the state of Oregon, are not obligated to pay the employer-share of the tax.  All employers may choose to pay any portion of the employee-share of the tax.

What Paid Leave Compensation is Available?

Weekly paid leave compensation is based on the relation of the employee’s pay to the average weekly wage.  The amount is capped at a maximum benefit of 120% of the average weekly wage (approximately $1,254) and a minimum benefit of 5% (approximately $50) of the average weekly wage.

Can Employers Waive Participation in the State Plan if they Already Maintain a Paid Leave Plan?

Employers can apply to the Director of the Employment Department for approval of an employer-offered benefit plan that provides family and medical leave insurance benefits to the employees.  There is a $250 application fee.  A plan submitted for approval must:

  • Be made available to all employees who have been employed for 30 days
  • Provide benefits that are equal to or greater than the weekly benefits and the duration of leave specified,
  • Provide leave for all of the circumstances specified,
  • Cost employees no more than the premium required by FAMLI.

What are the Notification Requirements?

Employers will be required to provide written notice to each employee of the duties and rights of an eligible employee.

What are the Penalties for Failure to Comply?

If the employer denies leave, discriminates against and employee or retaliates may be subject to civil action and penalties of up to $1,000 per occurrence.

How is the new FAMLI Program different from the Current Family Leave Act?

The new FAMLI program provides paid leave.  The current Oregon FLA provides unpaid leave and applies to employers with 25 or more employees within the state of Oregon.

Under the current FLA, employees are eligible for up to 12 weeks of unpaid leave during a 12-month period.  A woman using pregnancy disability is entitled to 12 additional weeks of leave, for a maximum of 24 weeks leave.  A person who has taken leave to care for an infant, newly adopted child, or newly placed foster child may take an additional 12 weeks of leave (for a maximum of 24 weeks of leave) to care for a child who is suffering from an illness, injury, or condition that requires home care.

Unpaid leave under the current FLA may be taken for:

  • Birth and care of a newborn child,
  • Placement of an adopted or foster child with the employee,
  • Care of an immediate family member with a serious health condition,
  • Employee’s own serious health condition, including incapacity due to pregnancy,
  • Sick child leave to care for the employee’s child that requires home care but is not a serious health condition
  • Death of a family member (two weeks)
  • Any qualifying exigency
  • Donate a body part, organ or tissue (effective January 1, 2020)

To be eligible for leave, an employee must be employed for the 180-day calendar period immediately preceding the leave and have worked at least an average of 25 hours per week during the 180-day period.  Benefits are continued as if the employee is actively employed, and the employee should be reinstated to the same position.

What should employers do now?

Employers don’t need to take any immediate action.  As with any new law, the state will release more information and administrative guidance closer to the 2023 effective date.  We also expect them to provide numerous clarifications, including how to reconcile differences between the new FAMLI law and the current OR FLA.

Disclaimer: The intent of this analysis is to provide the recipient with general information regarding the status of, and/or potential concerns related to, the recipient’s current employee benefits issues. This analysis does not necessarily fully address the recipient’s specific issue, and it should not be construed as, nor is it intended to provide, legal advice. Furthermore, this message does not establish an attorney-client relationship.  Questions regarding specific issues should be addressed to the person(s) who provide legal advice to the recipient regarding employee benefits issues (e.g., the recipient’s general counsel or an attorney hired by the recipient who specializes in employee benefits law).

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