An overview of what employers and employees should know before January 1, 2023.
By T.J. Sullivan & Beth Black, Hagan Hamilton Insurance
In 2019, the Oregon Legislative Assembly passed the Paid Family Medical Leave Act, which established a paid leave insurance fund for Oregon employees. Beginning on January 1, 2023, employers and employees will begin paying into this fund as the law goes into effect.
The passage of this law begins a new program called Paid Leave Oregon, which provides up to 12 weeks of paid time off, or 14 weeks if the leave is due to pregnancy-related situations. This program is funded by a 1% payroll tax, which starts January 1, 2023.
Businesses with fewer than 25 employees on payroll will be exempt from the 40% employer portion of the tax. Employees will always be paying 60% of this.
Employees can collect this benefit beginning on September 3, 2023. Employees who made $1,000 or more in the year prior to applying qualify, even if they worked for a different employer.
Private Plan Alternatives
Oregon is now the 11th state in the nation to provide paid leave to eligible employees. The State of Washington passed a similar law and instituted a similar program, which just recently forced its payroll tax to increase from 1% to 2%.
For long-term planning, Hagan Hamilton has found success with clients by setting them up with private pay plans. Here in Oregon, there are several insurance carriers that can offer a private plan alternative to the public option.
These private plans give your employees the same benefits paid in a timely manner by companies that already have the people, infrastructure, and systems in place to handle the claims. As the employer, these plans are often sold at a savings compared to what the public option would cost. Perhaps the biggest incentive to the private option is that signing up before January 1, 2023 means you don’t need to start paying premiums until September 2023.
To learn more about the new law and how it will impact Salem-area businesses, watch the recording from the Salem Chamber’s July Public Policy Committee Meeting on the subject. Simply visit salemchamber.org and type “paid leave” in the search bar. You can also find the recording on the Salem Chamber’s YouTube Channel (salemchamber).
Hagan Hamilton is the largest family-owned independent insurance agency and has been doing business in Oregon for more than 100 years. We currently have five locations, with a sixth coming soon to Salem. If you would like more information about partnering with our firm to save you money and deliver a better experience, please contact us at HHteam1@haganhamilton.com.