Oregon Employee Handbook Requirements (2026)

Oregon's Paid Family and Medical Leave Insurance (PFMLI) program, codified under ORS 657B, provides up to 12 weeks of paid leave (14 weeks for pregnancy-related conditions) funded by a 1% premium on employee wages up to the Social Security wage base ($168,600 in 2024). That premium is split: employees pay 60% and employers with 25 or more employees pay 40%.

Here is where employers get tripped up:

• Small employers are not exempt from everything. Businesses with fewer than 25 employees do not pay the employer share, but they must still collect and remit the employee portion (0.6% of wages). Many small employers mistakenly believe the entire program does not apply to them and fail to withhold anything.
• Equivalent plans require approval before you stop remitting. Employers can use a private plan instead of the state program, but it must meet or exceed state benefits and be approved by the Oregon Employment Department. Stopping premium remittance before approval triggers back-payment obligations plus penalties of up to 1% of total wages.
• Retaliation claims are enforced by BOLI. As of July 2024, the Bureau of Labor and Industries (BOLI) directly enforces job protection and anti-retaliation provisions for Paid Leave Oregon. Employers who deny reinstatement or discipline employees for taking PFMLI leave face civil penalties and back-pay awards.
• OFLA and PFMLI interaction is complex. Starting July 1, 2024, Paid Leave Oregon leave is no longer capped separately, and employees may take the full amount of both OFLA and PFMLI benefits in a benefit year. Employers who cap total leave at 12 weeks assuming the programs run concurrently may be denying legally protected leave.

A 30-person employer that fails to withhold and remit employee premiums for a year faces back-premium liability for all employees plus potential penalties, while their workers cannot access PFMLI benefits they are entitled to.

The fix: Register with the Oregon Employment Department regardless of size. Confirm whether you owe the employer share based on your headcount. Set up payroll to withhold 0.6% of wages for the employee share. If you operate a private plan, get written approval before making changes. Review your leave policies to ensure OFLA and PFMLI entitlements are not incorrectly capped.

Sources: ORS 657B (Paid Family and Medical Leave Insurance); Paid Leave Oregon; BOLI Legislative Updates.

Oregon's Fair Work Week Act (ORS 653.412-653.485) is the first statewide predictive scheduling law in the country. It applies to employers in retail, hospitality, and food service with 500 or more employees worldwide. The law requires 14 calendar days of advance written notice for work schedules, and any changes after that window trigger penalty pay.

The penalty structure is what catches employers:

• Adding hours triggers full penalty pay. If an employer adds more than 30 minutes of work to an employee's shift with less than 14 days' notice, the employee earns one additional hour of pay at their regular rate, on top of wages for the actual hours worked.
• Cutting hours triggers half-rate penalty pay. When an employer subtracts hours, changes a shift resulting in lost hours, or cancels a shift entirely, the employee earns half their regular hourly rate for each scheduled hour they do not work. A canceled 8-hour shift means 4 hours of penalty pay even though the employee stays home.
• Right to rest between shifts. Employees must have at least 10 hours between the end of one shift and the start of the next. If they voluntarily agree to work a "clopening" shift (closing then opening), they earn time-and-a-half for the hours within that 10-hour rest window.
• The 2024 leave exception is narrow. As of July 1, 2024, employers no longer owe predictive scheduling penalty pay when covering shifts for employees on Paid Leave Oregon, OFLA, or related statutory leave. But this exception only applies to that specific scenario. All other short-notice changes still trigger penalties.

For a restaurant chain with 600 employees making 20 schedule changes per week at an average of $16/hour, the penalty exposure from poor scheduling practices can exceed $15,000 per month.

The fix: Lock schedules 14 days out and treat the deadline like a payroll deadline. Train managers that last-minute changes have a direct cost. Track all schedule modifications and the associated penalty payments. Use scheduling software that flags changes within the 14-day window before they are finalized.

Sources: ORS 653.412 (Predictive Scheduling Definitions); BOLI - Predictive Scheduling; OAR 839-026 (Employee Work Schedules).

Oregon's non-compete law (ORS 653.295) is among the most restrictive in the nation. For agreements entered into on or after January 1, 2022, a non-compete is void (not merely voidable) unless every requirement is met. The key thresholds:

• Salary floor: The employee must earn at least $116,427 annually (2025 figure, adjusted each year by CPI-W West Region). If the employee earns less, the agreement is void as a matter of law, regardless of what it says.
• Maximum duration: Non-competes cannot exceed 12 months from the date of termination. Any term beyond 12 months is void and unenforceable.
• Notice requirement: Employers must either inform the employee in writing at least two weeks before their first day that a non-compete will be required, or enter the agreement only upon a subsequent bona fide advancement.
• Post-termination copy: The employer must provide a signed, written copy of the non-compete terms within 30 days after termination.
• Garden-leave pay: The non-compete is enforceable for up to 12 months only if the employer agrees in writing to pay the greater of 50% of the employee's annual gross base salary and commissions, or 50% of $100,533 (adjusted annually), for the restricted period.
• Protectable interest: The employer must demonstrate the employee had access to trade secrets or competitively sensitive confidential business information.

What employers get wrong: using template non-competes from other states that do not meet Oregon's salary threshold, failing to provide the two-week advance written notice, or neglecting to deliver the post-termination copy within 30 days. Any single failure renders the agreement void.

The fix: Audit every active non-compete against the current salary threshold. Remove non-competes from offer letters for employees below the threshold. Build the two-week advance notice into your hiring workflow. Calendar the 30-day post-termination delivery deadline. Budget for garden-leave payments if you intend to enforce.

Sources: ORS 653.295 (Noncompetition Agreements); BOLI - Noncompetition Agreements.

The Oregon Equal Pay Act (ORS 652.220) prohibits pay differences based on protected class (race, sex, age, religion, sexual orientation, disability, and more) for work of comparable character. It also bans employers from seeking salary history from applicants or their current and former employers.

The enforcement teeth are real. Employees can file complaints with BOLI or bring civil actions within one year of the violation. Courts can award back pay for up to two years, plus compensatory and punitive damages. For repeat offenders or employers acting with malice, there is no cap on punitive damages.

But here is the detail most employers miss: Oregon offers a safe harbor that can shield you from compensatory and punitive damages. If, within three years before an employee's claim, you completed a good-faith equal pay analysis that was reasonable in detail and scope for your organization size, and you made reasonable and substantial progress toward eliminating any identified pay gaps, the court must disallow compensatory and punitive damages. You may still owe back pay, but the exposure drops dramatically.

Where employers stumble:

• Asking about salary history before an offer. Even a casual "What are you making now?" in a phone screen violates the Act. As of January 1, 2024, employees can file civil suits specifically for salary history inquiry violations.
• Relying on market data without documenting the analysis. "We pay market rate" is not a defense unless you can demonstrate a structured pay equity review.
• Ignoring the safe harbor. Running an equal pay analysis costs time but dramatically reduces litigation exposure. Employers who skip it face uncapped punitive damages if a claim is filed.

The fix: Conduct an equal pay analysis now and document it thoroughly. Remove all salary history questions from applications, interview guides, and recruiter scripts. Train hiring managers that voluntary disclosure by the candidate can only be used to support a higher offer, never a lower one. Repeat the analysis at least every three years to maintain safe harbor eligibility.

Sources: BOLI - Equal Pay; Oregon Pay Equity Law Overview.

Oregon's final pay rules under ORS 652.140 are among the strictest in the country, and the penalty for noncompliance is designed to hurt.

The timing requirements:

• Involuntary termination: All earned wages must be paid by the end of the first business day after the termination date.
• Voluntary quit with 48+ hours' notice: Final wages are due on the employee's last day of work.
• Voluntary quit without notice: Final wages must be paid within five business days or by the next regular payday, whichever comes first.

The penalty under ORS 652.150 is what makes this dangerous: if an employer willfully fails to pay on time, penalty wages continue accruing at the employee's regular daily rate (8 hours per day) for up to 30 days. For an employee earning $30/hour, that is $240/day, up to $7,200 in penalties on top of the actual wages owed.

Oregon does offer a limited safe harbor: if the employer pays the full amount within 12 days of receiving written notice from the employee, the penalty is capped at 100% of the unpaid wages rather than the full 30-day accrual.

Common mistakes:

• "We will include it in the next payroll run." This violates the next-business-day requirement for involuntary terminations. Even a two-day delay starts the penalty clock.
• Forgetting accrued vacation. Final pay must include all earned but unpaid compensation: wages, overtime, accrued vacation (if the employer's policy provides for payout), and earned commissions or bonuses. Missing any component means the payment is incomplete and penalties continue.
• Disputing the amount instead of paying. If there is a dispute over a portion of wages, the employer should pay the undisputed amount immediately and resolve the disputed portion separately. Withholding everything while the dispute plays out triggers penalties on the entire balance.

The fix: Pre-calculate final pay before any planned termination. Have a same-day or next-business-day payment process ready. Keep a final pay checklist covering base wages, overtime, PTO, commissions, and bonuses. If a former employee sends a written demand, pay within 12 days to invoke the safe harbor.

Sources: ORS 652.140 (Payment of Wages on Termination); ORS 652.150 (Penalty Wages); BOLI - Paychecks.