Paid Family & Medical Leave in Oregon and Colorado: What Do You Need to Know?

Posted on 30 March 2023 by IRIS FMP

Categories: Global HR

US businesses have had to introduce more flexibility in response to the COVID-19 pandemic. With remote working, sickness and isolation thrown into the mix, it has since created a greater need for employment security, especially for employees. Since March 2020, legislators in the United States have introduced further regulations for companies regarding paid leave.

As well as offering more flexibility and trust in employees, legislators have pushed through paid sick and family leave in the states of Colorado and Oregon. They joined 13 other states with enacted paid family leave already in place, alongside 14 states that already offered sick leave.

For employers, changes are required now. There are additional deadlines to be aware of when dealing with paid family and sick leave requests, and these require immediate action to support your payroll. New regulations are due to be introduced from 2023 onwards, with further legislation likely to evolve. Many businesses across the two states have less than a year to react.

What Paid Leave Changes are Happening in Oregon and Colorado?

In response to a growing need for flexibility, the states of Colorado and Oregon introduced measures that ensured job security for employees during the COVID-19 period. As part of employment law, workers were entitled to take paid sick leave as well as paid family leave. This development assisted employees too ill to work or require time off to care for relatives.

As the world has begun to recover from the pandemic, there have been further developments for both paid sick and family leave legislation. In response to urgent flexibility and security during family and sickness emergencies, there is a greater onus on employers to ensure their staff are supported. Local authorities have also established that businesses operating in their areas need to do more for employees’ rights. In turn, state-specific employment laws have been altered for enhanced security…

So, what is covered for employees under this paid leave scheme and what do employers need to know?

When Does Colorado Paid Family and Medical Leave Start?

Employees in Colorado will be able to claim from January 2024.

As part of a new scheme to ensure paid family medical leave is available, employees and employers will start contributing through their payroll. A 50/50 split between both parties funds the system for a 12-week period in which an employee can take paid family and medical leave.

Colorado currently has sick leave in place for those suffering from Coronavirus. Revised legislation, in place until January 2023, offered sickness leave to those experiencing other illnesses, such as influenza, and ensured employees had the time to recover before returning to work. This sick leave could migrate into new paid leave legislation.

It is currently in legislation that Colorado employers must provide up to 80 hours of paid leave in response to Public Health Emergency Leave. New regulations in 2022 affected employers and employees further. Up to 80 hours of paid sick leave was given in response to an employee suffering from other respiratory issues. Since January 2023, the legislation reverted to covering COVID-19-related sick leave only.

As COVID-19 measures and regulations begin to be phased out, they are replaced by the paid family and medical leave scheme. This will cover more paid leave opportunities for employees while ensuring there are no grey areas for workers.

When Does Oregon Paid Family and Medical Leave Start?

Eligible workers from Oregon can apply from September 2023.

Similarly to Colorado’s scheme, Oregon will also offer up to 12 weeks of paid leave within a 12-month period. Not only will this offer employees additional security with their employment during stressful or emergency circumstances, but it will open a better dialogue between employers and employees too. Mutuality offers excellent working relationships between both parties and will ensure any trust issues are eradicated.

During the COVID-19 pandemic, Oregon, like many other states, faced calls to increase job security for employees when the virus hit. As a result, emergency paid sick leave was granted for Coronavirus-related illnesses. However, with many other states leading the way in advanced paid family and medical leave legislation, Oregon began proceedings for paid leave to be funded.

Since the 1st of January 2022, employers have been organising payroll contributions for employees to start benefiting from paid leave in 2023. As of January 2023, employers have started withholding employee contributions from their wages and have also begun paying in too.

Those on the paid leave scheme will feel reassured. The paid family and medical leave scheme in Oregon will offer greater convenience for employees suffering from significant health conditions, as well as securing employment for those on maternity leave too. Larger life changes or illnesses will no longer be accompanied by anxiety around their employer’s stance; they’ll also benefit from an income during their period of absence.

What Do Colorado Employers Need to Consider with Paid Family and Medical Leave?

1. Local Governments Can Withdraw from the Scheme

It’s possible for local authorities to completely remove themselves from the paid family and medical leave scheme. Unfortunately, there are potential consequences to doing so. It can make job opportunities and benefits packages look unappealing compared to competitors. This could seriously hinder the fulfilment of job roles for Colorado businesses, causing business continuity to be affected.

2. Private Employers Might Need to Adapt Current Packages

Any entity not considered to be the state, political or municipal corporation, or any other public agency is classed as a private employer. Private employers already offer some form of a private benefits package for their employees. As part of the paid family and medical leave plans, private employers will need to prove their versions are equal to or exceed state-run schemes. Private employers will need to submit their plans and pay premiums until approved. For those ready to register, the opportunity is now available. Any premiums paid in the lead-up to the approval stage are able to be refunded on request.

3. Employers and Employees May Need to Split the Payment 50/50

Colorado’s paid family and medical leave rate equates to 0.90% of an employee’s wages. Therefore, employees and employers will need to contribute a 0.45% share each. Colorado businesses with less than 10 employees are not required to pay their 0.45% share. Those with more are expected to contribute.

4. Employees Earning More Than $160,200 (as of 2023) Don’t Qualify

Those who are earning above the Social Security base wage will not be applicable to pay the premiums for the paid family and sick leave scheme. Anyone receiving a wage below $160,200 will require a 0.45% share of their wage to be paid into the scheme with employers matching the same 0.45% contribution.

5. Employees Can Take Continuous or Fragmented Leave

Dependent on an employee’s need, the paid family and medical leave scheme will not restrict the manner in which the leave is taken. For example, those dealing with ill health and requiring extensive recovery time will be entitled to take up to 12 weeks consecutively. Alternatively, paid family and medical leave days can be taken sporadically or in line with medical appointments. Employers will be given advanced warning for appointments, allowing them to ensure business continuity. However, record keeping will be important to ensure accurate paid leave is afforded.

What Do Oregon Employers Need to Know About Paid Family and Medical Leave?

1. Benefits Can Be Applied for from September 2023

Unlike Colorado, Oregon employees can benefit from the scheme much sooner. From Q3, employees will be able to put forward their case for taking paid family and medical leave. In addition to this, employees taking paid leave will have their job and role protected if they’ve worked for the same employer for at least 90 consecutive days.

2. Smaller Employers with Less Than 25 Employees Can Contribute, If Chosen

Employers in Oregon that employ less than 25 workers will not be required to pay their share into the scheme. However, they can opt in and apply for assistance grants as well. This will entitle smaller employers to various forms of financial support.

3. Employees Pay 60% of the Total Contribution

In total, employees will be entitled to 1% of gross wages through the paid family and medical leave scheme. For anyone earning under $132,900, approximately 0.60% will be contributed by the employee, with applicable employers contributing up to 0.40%.

4. Employers Will Need to Withhold, Report and Submit Contributions

From January 2023, employers will need to communicate with employees the nature of the paid leave scheme, with mandatory posters available in workplaces to explain. With every pay packet, employers will need to withhold up to 0.60% of an employee’s wage so it can be contributed towards the scheme. These findings will need to be reported on and submitted for payroll purposes.

5. Employers Don’t Decide If an Employee Can Benefit

Each individual case for paid family and medical leave is determined by Paid Leave Oregon. Employers will not need to determine whether an employee is eligible for the scheme, or whether they are permitted to take the leave. However, employees will need to disclose the need to take leave with their employer.

What is the Criteria for Paid Family and Medical Leave in Colorado and Oregon?

Starting from the 3rd of September 2023 (Oregon) and the 1st of January 2024 (Colorado), certain employees will be able to take paid family and medical leave. If they qualify, up to 12 weeks of leave will be granted. The following criteria must be reached:

  • Employee is caring for a new child, either through birth, adoption or foster care
  • Employee is caring for a dependent with serious health complications
  • Employee is taking leave due to domestic violence, sexual assault or abuse
  • Employee is dealing with a serious medical condition
  • Employee must make arrangements for a family member’s military deployment

Additional eligibility criteria for Colorado:

  • Employee has earnt more than $2,500 in the previous working year
  • All Colorado workers, earning more than $2,500, are entitled to this leave
  • Self-employed workers can apply

Additional eligibility criteria for Oregon:

  • Employee has earnt at least $1,000 in the year prior
  • Full-time and part-time workers are secured, including those working multiple jobs
  • Self-employed and contractors can apply
  • Another 4 weeks of unpaid leave can also be taken after the initial 12 weeks have been used

You Need a Trusted Payroll Company to Support with Paid Leave Changes Throughout Oregon and Colorado

At IRIS FMP, we offer international payroll services that understand the complexities of new leave legislation and regulations. Find out more today.