Oregon has built one of the most comprehensive paid leave frameworks in the country through two distinct systems: a statewide paid sick leave law that has covered employees since 2016, and Paid Leave Oregon — a state-run paid family and medical leave insurance program that launched in September 2023. Understanding how these two systems interact is essential for both Oregon employees and employers.
Oregon's approach is notable for its layered design. The sick leave law creates a floor for everyday illness and care needs. Paid Leave Oregon then adds a separate, richer benefit for major life events — a new child, a serious health condition, or a family caregiving need. Together they represent a level of paid leave infrastructure that puts Oregon among the top five most protective states in the country.
⚖️ Oregon Paid Leave — At a Glance (2026)
Oregon Sick Leave: The Foundation
Oregon's sick leave law (ORS 653.606) requires employers with 10 or more employees to provide paid sick leave. Employers with fewer than 10 employees must provide unpaid sick leave. Portland has a slightly lower threshold: employers with 6 or more employees in Portland must provide paid sick leave.
Accrual works as follows: employees earn 1 hour of sick leave for every 30 hours worked, up to a maximum of 40 hours per year. The leave can carry over year to year, but employers can cap the total balance at 80 hours. The 90-day waiting period applies to usage (employees accrue from day one but cannot use leave until after the first 90 days of employment).
Oregon sick leave is broadly usable — not just for the employee's own illness. It covers:
- The employee's own physical or mental illness
- Care for a family member who is ill
- Preventive medical care for the employee or a family member
- Absences related to domestic violence, harassment, sexual assault, or stalking
- School or childcare closures due to public health emergencies
Paid Leave Oregon: State-Run Family & Medical Leave Insurance
Paid Leave Oregon (PLO) is Oregon's answer to the gap between sick leave (short-term, employer-funded) and FMLA (unpaid, job-protected). PLO is a state-administered insurance program — similar in structure to Washington's PFML or California's SDI — that provides wage replacement benefits for major qualifying events.
Employees who have earned at least $1,000 in wages during the base year are eligible. Benefits pay up to 60% of wages (with a higher replacement rate for lower-income workers), capped at 120% of the state average weekly wage. The maximum benefit period is:
- 12 weeks for family leave (bonding with a new child, caring for a seriously ill family member)
- 12 weeks for medical leave (the employee's own serious health condition)
- 14 weeks for pregnancy-related conditions including childbirth recovery
- An employee can use both family and medical leave in the same year, up to a combined maximum of 14 weeks (or 18 weeks with a pregnancy leave and family bonding combined)
PLO Contributions: Who Pays What in 2026
Paid Leave Oregon is funded through payroll contributions. For 2026, the total contribution rate is 1% of wages, applied to wages up to the Social Security wage base ($176,100 in 2026).
| Employer Size | Employee Share | Employer Share | Total |
|---|---|---|---|
| 25+ employees | 60% of 1% = 0.60% | 40% of 1% = 0.40% | 1.00% |
| Fewer than 25 employees | 60% of 1% = 0.60% | Not required (0%) | 0.60% (employee only) |
Small employers with fewer than 25 employees do not have to pay the employer share of the premium — but their employees are still eligible for PLO benefits. Small employers can voluntarily pay the employer share if they choose. Benefits are paid directly by the state, not by the employer, so the cash flow impact on employers during leave is minimal.
Vacation and PTO Payout at Termination
Oregon does not have a statute that explicitly requires vacation payout at termination — but Oregon's Bureau of Labor and Industries (BOLI) treats accrued vacation pay as earned wages when an employer's policy promises it. In practice, BOLI will investigate and enforce wage claims for unpaid accrued vacation if the employer's policy indicated those hours would be compensated.
Use-it-or-lose-it vacation policies are permitted in Oregon, but employers must communicate them clearly and apply them consistently. A policy that says "vacation is forfeited at year-end" is legal; a policy that promises payout and then reneges is a wage violation.
Portland's Slightly Different Rules
Portland was one of the first cities in the US to pass a paid sick leave ordinance (2014), which served as the model for the statewide law. Since Oregon's statewide sick leave law passed in 2016, most Portland-specific requirements have been superseded — with one key exception: the employer-size threshold is 6 employees in Portland versus 10 statewide for paid (vs. unpaid) sick leave.
Portland employers with 6–9 employees must provide paid sick leave, even though the statewide law would only require unpaid leave for that size employer outside Portland. This is a meaningful difference for small Portland businesses.
For Oregon Employers: Compliance Priorities
- ☐ Confirm whether you're subject to paid or unpaid sick leave (10+ statewide, 6+ Portland)
- ☐ Sick leave policy must clearly state accrual rate (1 hr/30 hrs), cap (40 hrs/yr), and allowable uses
- ☐ Register with Oregon's Paid Leave Oregon system and begin withholding employee contributions
- ☐ Determine whether you qualify as a 25+ employer (employer contributions required) or small employer
- ☐ If offering an equivalent plan, apply for PLO exemption through the Oregon Employment Department
- ☐ Clarify termination payout rules in handbook — ambiguous policies create BOLI wage claim exposure
- ☐ Coordinate policy for concurrent use of accrued sick leave and PLO benefits
Plan Your Oregon Leave Year
Between sick leave accrual and PLO benefits, Oregon employees have real paid leave resources. Use our free tools to track your balance and plan your time off strategically.
Open the PTO Calculator →Frequently Asked Questions
Does Oregon require paid sick leave?
Yes. Oregon's sick leave law (ORS 653.606) requires all employers with 10 or more employees (6 or more in Portland) to provide paid sick leave. Employees accrue 1 hour per 30 hours worked, up to 40 hours per year. Smaller employers must provide unpaid sick leave.
What is Paid Leave Oregon?
Paid Leave Oregon is a state-run paid family and medical leave insurance program that launched September 3, 2023. It provides up to 12 weeks of paid leave (14 for pregnancy complications) for qualifying family, medical, or safe leave reasons, funded through payroll contributions from employees and employers.
Does Oregon require PTO payout at termination?
Oregon does not require payout of accrued sick leave at termination. For vacation or general PTO, Oregon's Bureau of Labor and Industries treats accrued vacation as earned wages when the employer's policy promises it. If your policy says accrued PTO is paid out at termination, BOLI will enforce that as a wage claim.
How much do Oregon employees and employers contribute to Paid Leave Oregon?
For 2026, the total PLO contribution rate is 1% of wages up to the Social Security wage base. Employees contribute 60% of the premium; employers with 25 or more employees contribute the remaining 40%. Smaller employers are not required to pay the employer share, though their employees still receive benefits.
Can Oregon employers substitute their existing PTO for PLO benefits?
Yes. If an employer has an equivalent plan that provides the same or better benefits than PLO, they can apply for an exemption from the state program. The equivalent plan must meet all PLO benefit standards, and the exemption requires approval from the Oregon Employment Department.
Does Portland have additional paid leave requirements beyond Oregon state law?
The main Portland-specific requirement that still differs from state law is the employer-size threshold for paid (vs. unpaid) sick leave: 6 employees in Portland versus 10 statewide. Portland employers with 6–9 employees must provide paid sick leave even though they would only be required to provide unpaid leave under state law alone.