Proclaimed as one of the most generous and inclusive state laws to have passed to date, Oregon’s paid family and medical leave bill, also known as the FAMLI Equity Act, was signed into law earlier this month by Governor Kate Brown on August 9, 2019. Oregon is the eighth state, not including the District of Columbia, to ratify legislation that requires paid family and medical leave for eligible employees. Oregon employers will soon need to make payroll changes—which may include making contributions.
Oregon’s FAMLI Equity Act
The FAMLI Equity Act is modeled after Oregon’s unemployment insurance program and takes effect on January 1, 2023. This law gives up to 12 weeks of paid leave to eligible employees. The program is funded with payroll deductions collected through employee and employer contributions, which will go into a state insurance program to fund the act. Contributions start on January 1, 2022, a year before employees can start utilizing the fund.
These employee contributions top off at 1% of an employee’s income; the employee pays 60%, and the employer pays 40%. Businesses who employ fewer than 25 people are exempt from making employer contributions. Employees who pay in, however, are still eligible for paid family leave benefits.
Eligible low-income employees will receive full wage replacement benefits during the paid leave if the employee’s average weekly wage is equal to or less than 65% of the state average weekly wage. Otherwise, the benefits are capped at 120% of the state average weekly wage, which is currently $1,200 per week.
Acceptable Reasons to Invoke Leave
The acceptable reasons to invoke the paid family leave are more broadly defined, which is an historic first for any state in the nation. For example, victims of sexual and domestic violence, harassment, sexual assault or stalking also qualify under the new act. For instance, a victim of domestic violence is defined as any person (or their child) who is the victim of an act committed by a member of the family or household that would violate the penal law that has resulted in the risk or actual physical or emotional injury. Victims would be eligible for paid leave under the new act.
Before the 2022 deadline—when funding and payroll deduction requirements go into effect—employers have at one more major requirement: notifying their employees of changes. Employers must provide written notice to all employees of their rights under the paid family and medical leave act by January 1, 2022. The Oregon Employment Department will provide an example of what is expected for the written notice and make it available on the Oregon Employment Department website by September 1, 2021.
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