Paid Leave Oregon – Model Notice Posting Deadline and Tax Guidance

The starting date for contributing to Oregon’s new paid leave program is quickly approaching and employers who have workers in Oregon need to be prepared.  Contributions to the program will begin on January 1, 2023, unless the employer filed a declaration of intent by November 30^th or has an approved equivalent plan.  See the November 22 Alert for details on contribution requirements.

Model Notice Posting Deadline

Paid Leave Oregon requires posting or distributing a Model Notice by January 1^st.  The state employment division has provided separate Model Notices for employers who are participating in the state plan and for employers who are opting out of the state plan for an Equivalent Plan.  Equivalent Plan employers will need to update the notice to accurately reflect their plan information.   The notification requirement is the same for all employers.  The notice must be posted at each Oregon worksite and provided electronically or by mail to any remote workers.

• The Model Notice for employers participating in the state plan can be found here
• The Equivalent Plan Model Notice from Paid Leave Oregon is available here. This notice needs to be customized with information on how to file claims and appeals
  • Note: suggested edits are available in this Model Notice for employers who do not have details from their plan administrator on how to file claims and appeals.

Oregon Department of Revenue Tax Guidance

On December 16^th, 2022, the Oregon Department of Revenue provided a response to tax questions related to Paid Leave Oregon.  The response confirms the taxability of contributions and benefit payments and includes instructions on how to complete the W-2 forms.

• Paid Leave Oregon contributions made by the employee are considered post tax and are included in employee’s wages subject to income tax withholding
• Family and safe leave benefits are fully taxable. Medical leave benefits are taxable based on the ratio of employee and employer contributions

The Oregon Department of Revenue letter with more details can be found here.  The federal taxability of benefits from Paid Leave Oregon is determined by the IRS.  The IRS has not provided this guidance as of this writing.

Let your IMA Benefits team know if you have any questions on these recent developments.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information. This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.