Paid Leave Oregon
Paid Leave Oregon (PLO)
What is it?
Paid Leave Oregon (PLO) is a new program that provides both job protection and paid leave for Oregon employees. It is also being called “Paid FMLA” or “OR PFML”.
When does this begin? (funding / benefit start dates):
The State program requires funding begin on January 1st, 2023, with benefits beginning on September 3, 2023. For private plans, funding and benefits both begin on September 3, 2023.
What types of leave are covered?
1. Family Leave (birth / bond with newborn / adoption, care for others medical needs).
2. Medical Leave (Care for yourself due to medical needs).
3. Safe Leave (domestic violence, harassment, abuse, stalking).
The leave provides full job protection for employees who have worked 90 days and have earned at least $1,000 prior to taking PLO. In addition, employers must maintain their contributions to the employee’s health plan during the leave.
Who does Paid Leave Oregon apply to?
PLO will apply to all eligible Oregon employees (not including federal and tribal).
From a business impact perspective, any employer with 25 employees or more will be financially impacted as they are required to help fund Paid Leave Oregon.
Employers with less than 25 employees are not required to pay the employer contribution; however, if an employer elects to pay it, the employer may apply to receive financial assistance to help with the costs of replacing an employee taking paid leave through a grant. Grants cover up to $3,000 per replacement with a maximum of $30,000 per year. Small employers must commit to paying employer contributions for at least eight calendar quarters after receiving the grant. Click here for more information on small employer grants.
Which employees are eligible?
Employees (FT or PT) who have earned $1,000 or more in the 12 months prior to claiming leave benefits are eligible. Independent contractors, employees of tribal governments, and federal government employees are not covered. People who are self-employed and tribal governments may opt into the program.
What about employees who work in other states?
The benefit eligibility is based off where the unemployment payroll tax is paid for employees earning $1,000 or more in the prior 12 months.
How is Paid Oregon Leave funded?
The plan will be funded through a new 1% of payroll tax. Payroll includes base pay, overtime, incentives and bonuses. Wages are capped at $132,900.
Of this 1%, employers (with 25+ employees) contribute 40% of the total rate. Employees contribute 60% (regardless of employer size). Employers can contribute more than 40% but cannot pay less. Additional details on the plan funding can be found here.
What is the benefit to employees?
Benefits are based on the State average weekly wage (SAWW), which is set at $1,224.82 through June 30th of 2023.
Those who earn 65% or less of the SAWW ($796.13 or less) will receive 100% of their pay (annualized pay at $41,398.92).
For any amount greater than this, employees will receive 65% of the SAWW + 50% of the excess, up to a maximum weekly benefit of $1,469.78 (120% of the SAWW).
I’ve put together an example, below:
EXAMPLE: Joes earns $80,000 per year. This is $1,538.46 per week.
· Joe will receive the first 65% of the SAWW, which is $796.13.
· Then, in addition to the $796.13 he will earn up to 50% of the remaining weekly amount up to the max.
· We calculate this by taking his total weekly earnings minus what he has received to get the difference, and then multiply the difference by 0.5 (50%). Here is the math:
· $1,538.46 - $796.13 = $742.33 * 0.5 = $371.17.
· We then add $796.13 and $371.17 to get a total of $1,167.30
· We then double check that Joe is not above 120% of the SAWW ($1,224.82 x 1.2) = $1,469.78.
We can conclude that Joe is eligible for $1,167.30*. *Note: Numbers are rounded & subject to change based on updated SAWW numbers.
A covered employee may qualify for up to 12 weeks of PLO benefit during a 12-month benefit year, plus an additional two weeks for pregnancy related disability.
Benefits can be taken 1 day at a time, they do not need to be taken all at once.
Concurrent Leave: Any family leave or medical leave taken must be taken concurrently with Oregon Family and Medical Leave Act (OFLA) or the Federal Family and Medical Leave Act (FMLA).
Can we go with a private option instead of the state plan?
Yes! Employers are not required to purchase coverage through the state. Exploring this option makes sense for employers with greater than 25 employees who are required to pay 40% of the 1% payroll tax. Small employers (under 25 employees) are likely better off with the state plan (due to the grants) or not paying into the program at all.
Employers can opt out of the state plan so long as they offer a program with benefits equal to or greater than the state plan. Opt out plans must remain in effect for at least one year and need to be approved by the state.
Many life and disability insurance carriers are providing opt out plans on an insured basis. Employers also have the option of self-insuring.
The Employment Department is expected to begin reviewing applications for opt out plans in September 2022.
Employers must submit applications by November 30, 2022 to be exempt from paying state plan contributions January 1, 2023. Employers can opt out at the beginning of any quarter. State plan contributions will apply for quarters prior to the employer’s opt out date. Learn more about the application process here.
Employer considerations for opting out.
Using a private carrier to administer the PLO may provide the following benefits:
· Avoid the State “Pre-funding” period (Saving 8 months of payments).
· Ease of administration and integration with existing STD and LTD benefits.
· Experienced claims adjudication and reliability in claims payment ability.
· Better coordination between all leaves (FMLA, OFLA, PLO and STD).
· The carrier will take care of getting the medical certification for the employee.
· Employers have more control over the process and the return to work requirements.
· Possibly better funded than the state program and likely quicker claim payments to employees.
Note: Private insurance carriers are including a lot of disclaimers with proposals to indicate that their proposals are not firm and will be subject to an updated census. Rates can also change if there are any adjustments to the State program.
Application fees for private plan approvals are $250 (nonrefundable) and must be completed yearly for the first 3 years.
A private carrier PLO plan could also add some employer responsibilities:
The employer is responsible for the state approval process for the opt out plan and also for complying with the state requirements for employee premium collection, notices, record keeping and state reporting. Penalties apply for lack of compliance.
An opt out plan may provide premium savings for the first year, but the individual employer’s utilization may affect the premiums in subsequent years.
Employers opting out for an equivalent PLO plan may be more involved in the claims process and the employee’s experience with the plan.
Application fees.
What other dates are important to know?
Sept. 1, 2022: The Director of the Employment Department will adopt rules necessary to implement and administer the program, including how to apply for approval of an equivalent plan.
Oct. 1, 2022: State will begin their review of equivalent plans (equivalent plan options must be submitted by November).
Jan. 1, 2023: Employers are expected to start making contributions to the Oregon Family and Medical Leave Insurance Fund, unless the employer has an approved equivalent plan.
Sept. 3, 2023: Qualified employees are expected to begin receiving benefits from the state program or approved equivalent plan.
Contact your JLJ employee benefits team if you would like assistance exploring the opt out options for PLO. Additional details about Paid Leave Oregon can be found on the Oregon Employment Department’s website.
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.