In addition to the federal labor laws companies must comply with, Oregon has its own set of labor laws that govern working conditions and compensation management laws. Oregon labor laws cover a wide variety of employment situations including discrimination, pay, leave, breaks, workplace safety, and payroll taxes.
Unless you're a larger company (and even still), you may want to leverage an Oregon payroll & HR service company like GNSA to help with understanding and complying with the state's labor laws that follow and assist with establishing policies, processes, and software to stay compliant with legislation.
Employers can use this article as a guide to help understand and manage compliance with legislation and labor laws throughout Oregon in a few key areas, which include, but are not limited to:
Oregon hiring laws encompass a variety of regulations designed to protect both employers and employees throughout the hiring process. These laws govern aspects such as discrimination, background checks, and employment eligibility verification.
Businesses in Oregon must submit certain information to the state when they hire new employees under Oregon New Hire Reporting Law.
Oregon New Hire Reporting is administered by the Oregon Department of Justice, Child Support Program.
When a new employee is hired, employers must report them to the Oregon Department of Justice, Child Support Program within 20 days, along with certain employee and employer information.
Employers can report new hires either by mailing or faxing the Oregon New Hire Reporting Form or by using the Employer Services Portal.
As of January 1st, 2024, a new requirement went into effect requiring that businesses report individuals who are independent contractors. However, this new requirement is undergoing a soft launch, and thus employers do not actually need to be in compliance until Spring of 2024.
Employers must abide by the laws and regulations in the state regarding Oregon background checks and pre-employment screening. These rules and legislation apply to conducting more traditional background checks and general pre-employment screening of applicants, candidates, and/or new hires.
Background checks can cover a wide range of information about potential employees, including criminal history, employment history, education history, and identity verification.
Per the Fair Credit Reporting Act (FCRA), background checks are only able to go back seven years, but there are some exceptions in which an employer may go back further for the following:
Under Oregon’s “ban the box” law it is unlawful for an employer to inquire about an applicant’s criminal conviction before the interview stage of hiring. Typically, criminal history is asked on a job application. If an interview is not conducted, an employer may not require applicants to disclose criminal convictions prior to the employer making a conditional job offer.
The City of Portland employers must adhere to a stricter “ban the box” ordinance. Employers in Portland employers must wait until a conditional job offer has been made before inquiring about criminal histories.
Under Oregon’s Pay Equity Law, employers may not inquire about information regarding a candidate’s past compensation history until the employer has offered the candidate employment.
Candidates are allowed to disclose information about their past compensation at their own discretion, but employers may not consider that information when going through the hiring and onboarding process.
In order to successfully process payroll in Oregon, employers need to ensure a proper understanding of Oregon payroll and compensation laws.
Here is what employers should know when processing payroll in Oregon.
Oregon has three minimum wages directed by geographic region through June 30, 2025. Note the correct wage an employer should pay depends on the employee’s work location.
Oregon’s minimum wage has had an increases scheduled every year on July 1st through 2023. After which minimum wage increases, if any, will be calculated based on inflation data each year by BOLI no later than April 30th:
|
Date |
Standard Counties |
Portland Metro Area |
Nonurban Counties |
|
July 1, 2019 |
$11.25 |
$12.50 |
$11.00 |
|
July 1, 2020 |
$12.00 |
$13.25 |
$11.50 |
|
July 1, 2021 |
$12.75 |
$14.00 |
$12.00 |
|
July 1, 2022 |
$13.50 |
$14.75 |
$12.50 |
|
July 1, 2023 |
$14.20 |
$15.45 |
$13.20 |
|
July 1, 2024 |
$14.70 |
$15.95 |
$13.70 |
|
July 1, 2025 |
Adjusted annually based on the increase, if any, to the US City average Consumer Price Index for All Urban Consumers |
$1.25 over the standard minimum wage |
$1 less than the standard minimum wage |
If not covered in an Oregon labor law poster, you will need to post a Oregon minimum wage poster or notice in a common space in your workplace that can be made visible to all employees.
Oregon overtime law entitles most hourly employees to overtime pay for any time worked over a total of 40 hours in a standard or single work week. A single work week is defined as any 7 consecutive workdays. Overtime pay is set at one and a half times an employee’s normal hourly wage.
A variety of people are exempted from overtime in Oregon, including those who work as fishermen, work for commission, or work in a "white collar" industry and earn over $27.63 per hour.
Labor law can prevent hospitals from requiring nurses to work over 12 hours a day or over 40 hours a week, although nurses can go over the limit if they choose to. However, there are generally no limits on how much overtime can be required from any other type of worker except as it relates to child labor law or juveniles under the age of 18.
HR professionals must pay close attention to Oregon's special overtime rules by industry, which include special rules for:
Oregon employers, under the Oregon Equal Pay Act, are required to pay employee equal pay for equal work regardless of race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age. Equal pay may not be achieved by making pay cuts. If not included in a labor law poster, employers must post an updated Oregon Equal Pay Notice visible to employees in a common area.
Oregon law requires that employers pay employees on a regular payday schedule which is not to be more than 35 days apart. In addition, employers may not withhold or delay a paycheck as a form of discipline or in exchange for the return of employer-owned items held by an employee.
Businesses need to ensure a proper understanding of Oregon Final Pay rules and regulations when employees leave or are terminated.
The specific rules and legal requirements for delivering the final paycheck to employees are as follows:
For employees who quit without providing 48 hours’ notice, excluding weekend and holidays, the final paycheck must be received within 5 business days or the next regular payday, whichever comes first.
For employees who quit and have provided 48 hours’ notice, the final paycheck must be received on an employee's last day of employment, unless that day is a weekend or holiday. If a weekend or holiday, the final paycheck is due the next business day.
For employees who are terminated by the employer OR employees who leave employment by mutual agreement, the final paycheck must be received by the end of the first business day after an employee leaves or is terminated by the organization.
Final paychecks should include all earned wages that an employee has not yet received. An employer may make a deduction to final pay when (and only when):
Oregon employers are not required to offer any vacation days to employees. However, when an employer does provide vacation as part of its employment contract, the final paycheck should include payment for the unused vacation an employee is entitled to receive.
As the intersection of Human Resources and other departments are often blurred, especially in start-ups and smaller companies it is important for HR professionals in Oregon to remain vigilant with well-established employee handbooks and policies. This may include seeking outside compliance help and subscriptions to outside resources to assist in compliance and risk mitigation when it comes to Payroll and all of the processes incumbent to properly administering payroll within a company.
In addition to traditional regulations around payroll processing, there are certain laws and payroll taxes that Oregon businesses should also be aware of.
On July 1, 2018, HB 2017, the Statewide Transit Tax (STT) went into effect, which requires all employers to withhold, report, and remit one-tenth of one percent (or 0.001%) of wages paid to employees. The STT is calculated based on the employee's wages as defined in ORS 316.162. Revenue from the STT goes into the Statewide Transportation Improvement Fund to finance investments and improvements in public transportation services, except for those involving light rail.
The Mass-Transit (TriMet) Tax is paid by the employer to the Oregon Department of Revenue and helps fund mass transportation in the TriMet District. Employers can determine if they are located in the TriMet District by viewing the zip code boundary list.
Effective January 1, 2021, the tax rate increased to 0.7837% of the wages paid by an employer and the net earnings from self-employment for services performed within the TriMet District boundary.
Oregon break laws may require three breaks during the typical 8-hour work day, but the number of breaks required will vary based on time worked.
Oregon employers must provide an employer paid rest break of 10 minutes for every 4 hours of work in one work period.
Employers must also provide a non-paid meal break or lunch break of at least 30 minutes to employees who work 6 to 8 hours in one work period. A meal break is not required if the work period is less than 6 hours. Additional meal breaks are required to be provided to employees who works 14 hours or more in a shift.
Meal breaks or lunch breaks are only non-paid if the employee is relieved of all duties. If an employee performs any duties during a meal break the employer must pay the employee for the whole meal break.
Here is a breakdown of required breaks for work periods with varying durations including and beyond the typical 8 hour shift or workday:
|
Shift Length |
Rest Breaks |
Meal Breaks |
|
2 hours or less |
0 |
0 |
|
2 hours 1 minute - 5 hours 59 minutes |
1 |
0 |
|
6 hours |
1 |
1 |
|
6 hours 1 minute - 10 hours |
2 |
1 |
|
10 hours 1 minute - 13 hours 59 minutes |
3 |
1 |
|
14 hours |
3 |
2 |
|
14 hours 1 minute - 18 hours |
4 |
2 |
|
18 hours 1 minute - 21 hours 59 minutes |
5 |
2 |
|
22 hours |
5 |
3 |
|
22 hours 1 minute - 24 hours |
6 |
3 |
Oregon employers are required to provide employees including hourly, salaried, and part-time, an appropriate / private location to express milk. This requirement lasts until the child is 18 months of age. Employers with 10 or fewer employees may assert an exemption if providing these breaks imposes an “undue hardship.”
For more information on required breaks or other Oregon Labor Laws regarding wages, leave, and other general employment conditions, you can reference ORS653 to see the legislation directly.
As of 2017 businesses in Oregon must maintain compliance with Oregon Predictive Scheduling.
Predictive scheduling applies to all employers in the state in the retail, hospitality, or food services industries with 500 or more employees, and was created with the primary intention of giving employees who need to care for children or other family members a chance to allocate their time appropriately, without sacrificing shifts and the opportunity to work.
Included in the legislation are requirements regarding schedules, shift changes, breaks, and more.
For those hiring and employing minors in Oregon, to help ensure compliance with the full list of Oregon Child Labor Laws, the Oregon Bureau of Labor & Industries (BOLI) provides the state regulations safeguarding working minors. Minimum wage, break requirements, prohibited or restricted occupations and duties, and varying work hour restrictions based on age are all are employment laws for minors to be aware of.
The legal working age typically starts at 14 years old in Oregon, with exceptions. Special rules apply to the agricultural and entertainment industries.
Employers must file an annual Employment Certificate Application with BOLI, to verify minors' ages through appropriate documents, and maintain a list of hired minors with a posted validated Employment Certificate.
In Oregon, minors are entitled to a 30+ minute meal break after six hours of work and a 15+ minute paid rest break for every four hours worked in a single shift.
Employers must adhere to specific guidelines regarding the hours minors can work based on their age. There are specific exceptions for minor workers involved in Career Exploration, Work Experience, or Work-Study programs.
Employers in Oregon must adhere to several different laws regarding employee leave in the state, in addition to any federal laws that apply such as the Family Medical Leave Act (FMLA). These include things Oregon Sick Time, Oregon Family Leave, and Oregon Paid Leave.
Oregon sick time law entitles employees to receive paid sick time if the employer has 10 or more employees. In Portland, employers must provide paid sick time if they have 6 or more employees. For any companies smaller than these, unpaid sick time is required. When creating a policy for employees, these Oregon Sick Leave Policy Samples will help reduce risk of non-compliance and make required sick time easier to initially implement if it's not done already.
Employers need to provide 1-hour of sick for every 30 hours worked up to 40 hours per year. Employees may begin to take sick time after worked they have worked for their employer for 90 days. Employers must regularly inform employees the amount of sick time they have earned.
Similarly to OFLA, employees must be notified of their rights, so a Oregon paid sick time poster or notice must be posted.
The Oregon Family Leave Act (OFLA) mandates that an employer with 25 or more employees must allow employees to take up to a total of 12 weeks of unpaid leave if the employee has worked an average of 25 hours per week for the previous 180 days.
Leave covered under OFLA:
During OFLA employers must continue to provide employees the same health insurance benefits when on leave as when at work. Additionally, employees must be returned to their former job or a similar position if the old job no longer exists.
In order to notify employees of their leave rights, an OFLA notice or posting must be made available.
UPDATE: Paid leave is available as of September 3, 2023 through Paid Leave Oregon covered in the next section of this article.
Paid Leave Oregon does not replace any existing Oregon sick time or leave programs, such as OFLA, FMLA, or Oregon sick time. Instead, paid leave often must run concurrently with these programs if the employer meets eligibility thresholds to comply.
Through Paid Leave Oregon, employees working throughout Oregon, in any sized business, are eligible for up to 12 weeks paid leave in a year (if the employee has made at least $1,000 in the calendar year leading up to submitting an application to the state). In some pregnancy-related situations, an employee may be able to take up to two more weeks for a total of 14 weeks.
This is not paid leave from the company, but from a state fund (similar to state unemployment). It is funded by contributions from the employee and / or employer.
The total contribution rate in 2023 for Paid Leave Oregon is 1% of an employee's gross earnings each pay period up to $168,600 of wages. The employee contribution is 60% of the total contribution rate (meaning 0.6% of an employee's gross earnings is deducted each pay period). The employer is required to contribute the remaining 40% of the total contribution rate only if the employer has 25 employees or more. Otherwise, the State of Oregon covers the remaining 40%.
No matter the size of the business, on January 1, 2023, employers were required to set up payroll for these deductions to collect and remit contributions quarterly to the Oregon Department of Revenue (DOR) AND report total employee counts and wages in Frances Online.
As of September 3, 2023, employees can submit applications for paid leave through the Paid Leave Oregon website.
Employers in Oregon need to be aware of two things in particular when it comes to administering employee benefits in the state. First, the impact of the Affordable Care Act (ACA) in Oregon, and more importantly, the Oregon Retirement Plan Mandate.
The Oregon retirement plan mandate requires by law that all employers in Oregon must offer a qualified Oregon retirement plan to employees. If the employer does not have a retirement plan, OregonSaves must be facilitated. Registration was required by certain dates based on the following employer sizes:
It is now required for all businesses with at least one employee as well as those utilizing a Professional Employer Organization (PEO) or Leasing Agency to offer a qualified retirement plan or OregonSaves.
Qualified retirement plans include:
While OregonSaves is somewhat simple to get started with, it may not be the best benefit for employees, nor the best administrative option for employers. Oregon businesses should consider reaching out to an Oregon Payroll Service about payroll-integrated 401(k) plans.
Oregon employers with 20 employees or less are required to provide employees and their dependents with COBRA coverage under the Oregon COBRA law.
Employees and their dependents are entitled to state continuation of coverage for up to 9 months if:
In order to qualify for continuation of coverage, the employee with coverage must have continuous health coverage for at least three months prior to when the coverage or employment ended. To learn more about Oregon Mini-COBRA, information can be found at the Oregon Division of Financial Regulation.
It should be noted that employers with 20 or more employees are subject to federal COBRA legislation and are eligible for coverage for up to 18 months of continued coverage.
Oregon employers have a long list of requirements when it comes to health and safety in the workplace. Particularly, certain industries need to be aware of special requirements under Oregon Occupational Safety and Health Division guidelines, especially for industries more common or unique to Oregon.
In addition to Oregon OSHA laws, employers should be aware of any federal requirements that also apply.
In 1973, Oregon enacted the Oregon Safe Employment Act, which seeks to ensure safe and healthy working conditions for employees who work in Oregon. The Oregon Occupational Safety and Health Division (Oregon OSHA) administers the Act and provides jurisdiction over private organizations and governments, local and state. As such, Oregon OSHA can inspect workplaces to ensure compliance.
Oregon OSHA provides a free OSHA poster for employers.
In addition to federal laws for equal opportunity employment and protections against discrimination, employers must also comply with certain state laws regarding discrimination.
The Oregon Workplace Fairness Act (OWFA), effective October 1, 2020, requires all Oregon employers to have a written harassment and discrimination policy containing procedures and practices for the reduction and prevention of discrimination against individuals which fall under Oregon’s protected categories.
Protected categories are considered any of the following:
Policies created under OWFA must also:
For ease-of-use, Oregon has created a sample OWFA Policy for employers in both English and Spanish.
Employers must make their OWFA policy available to every employee in the workplace. New employees must be given a copy of the policy at the time of hire. Also, any employee who complains of discrimination, harassment, or sexual assault must be given a copy of the policy.
Under Oregon Law employers may not discriminate in employment because an individual is a victim of domestic violence, harassment, sexual assault, or stalking.
Employers must also provide reasonable changes to support employees who experience domestic violence, harassment, sexual assault, or stalking or are the parent or guardian of the victim. An employer’s reasonable changes include transfer, reassignment, modified schedule, unpaid leave, changed work number, changed workstation, installed lock, new safety procedure, or other adjustment after threatened or actual events. In addition, victims may have protective leave to find legal or law enforcement assistance, get metal treatment or mental health support, change living situation
Employers must take action to make reasonable accommodations for an employee experiencing limitations related to pregnancy, childbirth, or a related medical condition such as lactation.
Reasonable accommodations can include:
Under Oregon Pregnancy Accommodation and discrimination protection laws, employers may not take any of the following actions as a result of pregnancy, childbirth, or a related medical condition such as lactation:
Oregon Workers’ Compensation Law pays for workers’ medical treatment and lost wages due to a work-related injury and / or illness. Oregon employers with at least one employee, full or part-time, must carry workers’ compensation insurance or be self-insured.
Workers’ compensation insurance not only protects workers but also protects employers by shielding them from liability lawsuits that might result from work-related injuries or illnesses.
Employers should be aware of the following topics regarding Oregon Workers' Compensation:
Whether you are an Oregon-based employer applying for workers' compensation coverage for the first time or want to change your current insurer, you will need a good Oregon insurance broker.
Oregon unemployment insurance aims to help employees in the state who are unfortunate enough to have been laid off or otherwise qualify for unemployment. While unemployment insurance is administered by the state, employers still have some responsibilities.
For starters, Oregon employers must generally provide unemployment insurance to employees if:
Oregon private employers must also pay a quarterly tax directly to the State of Oregon. For domestic employers, this is done annually. State and federal government employers, on the other hand, must reimburse the state for UI benefits paid to former employees.
Local governments and non-profit private sector employers have the option of choosing either of the above two options.
The Oregon Unemployment Insurance tax rate for new employers is 2.4% of taxable wages up to $52,800 for the 2024 calendar year, up from a rate of 2.1% of taxable wages up to $50,900 per employee for 2023.
Other employer responsibilities include:
Under the Oregon Bureau of Labor and Industries (BOLI), several conditions are required to have a valid agreement that restricts the kinds of work that an employee may perform and where it may occur once the employee has separated from the employer.
To have a valid noncompetition agreement, the employee must either:
In addition, a noncompetition agreement may also be void unless:
Oregon employers are required to display the following posters in a clearly visible location where employees can regularly view them. If an employer has more than one work location, they are generally required to display a poster at each worksite.
Posters required for all employers:
Employers of agricultural workers, large retail, hospitality, or food service employers with 500 plus employees, and live entertainment employers may have employer-specific workplace policies or notices required.
For help with labor law posting compliance, consider a labor law poster subscription or e-update service.
Along with labor law posting requirements, Oregon employers must maintain compliance with recordkeeping requirements. Employers must keep the following records:
Oregon employers must provide the following information in an employee’s personnel file:
Employers must keep an employee’s records for at least 60 days after termination. Any records that have been requested by an employee must be produced within 45 days of the employee’s request.
Oregon has specific labor laws that vary by geographic region and cover most employment situations. These labor laws were created to give guidance to the employer and to protect employees. Research and understanding the various labor laws will ensure employers' adherence to Oregon law and reduce payroll errors.
Oregon is known for its frequent legislative updates when it comes to labor laws, and so it is crucial to have an Oregon Payroll and HR Service that can support your compliance, HR, and payroll operations.
Contact us today to get help, or find a provider in Oregon today.