Paid Leave Oregon: PFMLI
Oregon becomes the second West Coast state, behind California, to introduce statutory Paid Family and Medical Leave Insurance.
Premium contributions will begin January 1, 2023, and employees can begin making claims by September 3, 2023.
PFMLI, or Paid Leave Oregon, covers up to 12 weeks of benefits per year:
- To bond with a child within the first year following birth, adoption, or foster care
- To care for a family member with a serious medical condition
- To care for yourself during a serious illness or injury
- Following sexual assault, domestic violence, harassment or stalking
The benefit also provides an additional two weeks for pregnancy, childbirth or related situations.
Who Qualifies for PFMLI Coverage?
PFMLI covers any employee who has earned $1,000 or more in the year prior to filing the claim. Federal government employees are not covered, but may have other federal programs in place.
Self-employed individuals and tribal governments may opt in. Organizations and companies who work with independent contractors need not contribute to self-employed plans. Private plans and their premiums are the responsibility of the contractor as a self-employed individual.
Who Is a Qualified Family Member?
Like Connecticut, Oregon has put a broad definition of “covered family members” in place.
PFMLI coverage includes spouses or domestic partners of covered individuals, parents, children, grandparents and their domestic partners, siblings and stepsiblings, plus any blood relative or relative “by affinity.” This includes anyone whose close association with a covered individual is the equivalent of a family relationship.
What Employers Should Know About Paid Leave in Oregon
PFMLI will require payroll deductions for funding. It is a cost-shared benefit, with employees contributing 60% and employers contributing 40% of no more than 1% of an employee’s covered wages. However, employers may choose to cover the full amount as part of employee benefits. In today’s competitive labor environment, employers may choose this route to help attract and retain workers.
The Oregon Employment Department will set the contribution rates, which may change annually. For 2023, contributions must equal 1% of an employee’s wages up to a cap of $132,900.
Employers have choices when it comes to PFMLI: They can participate in the state program, which is administered, managed, and funded through the Oregon State Fund or they can obtain a private policy through an approved carrier. Equivalent plans must provide benefits equal to, or better than, the state plan, at rates equal to, or lower than, the state plan.
The state will begin reviewing equivalent private plans in September 2022, which means that brokers can begin providing quotes to Oregon business owners for review at any time.
Companies can privatize their coverage on the first day of the calendar quarter following the state’s approval of the plan. Employers must re-submit their plans for annually for three years after their initial approval or if the terms of their plan change.
How PFMLI Works with Other Benefits
PFMLI must be considered separately from vacation, most paid sick leave, and other paid time off. However, employers may allow other paid leave claims, such as voluntary worksite benefits that offer salary replacement or partial salary replacement. Such claims, in conjunction with PFMLI, may not equal more than 100% of an employee’s normal wages.
PFMLI claims cannot be filed while an employee is collecting worker’s compensation for an on-the-job injury or illness or unemployment benefits. PFMLI is designed for off-the-job injuries and illnesses, as well as to care for loved ones of the insured under specific circumstances, which are detailed above.
PFMLI vs. OFLA and FMLA
PFMLI is a paid benefit. It runs concurrently with the Oregon Family Leave Act and the federal Family Medical Leave Act. For those familiar with those benefits, both OFLA and FMLA provide unpaid job protection for employees on leave or disability.
Under OFLA, employees will not lose seniority, pension benefits, or healthcare benefits (if provided) while on leave. An employee who has been with an organization at 90 days is also guaranteed the right to return to their prior job.
Employers with fewer than 25 employees may have more flexibility with workers returning to their prior position if the position no longer exists.
PFMLI reinforces these protections but also provides paid leave.
How Much Will Oregon Workers Receive with PFMLI?
Oregon’s Paid Leave program pays different amounts depending on a worker’s average weekly wage compared to the state average weekly wage, which is recalculated annually. For 2023, the State Average Weekly Wage is $1,224.82.
Workers earning 65% or less than the SAWW will receive 100% of their average weekly wage. The benefit provides full salary replacement.
Those making more than 65% of the SAWW can claim 65% of SAWW, plus 50% of their own AWW over 65% of SAAW, up to 120% of SAWW. No employee should receive less than 5% of the SAWW.
Why Brokers Should Work with DBL Center to Help Their Clients Privatize PFMLI
The State of Oregon is permitting companies to privatize PFMLI from the start for tremendous cost savings and more personalized service. Claims may be processed in four days or less.
No pre-payments are necessary aside from a $25 per employee deposit, which will be credited to the first premium payment when you work with DBL Center.
The DBL Center can write PFMLI as a stand-alone benefit. There is no need to bundle ancillary benefits or voluntary worksite benefits with an Oregon Family Leave plan, although clients might save even more money by doing so.
The DBL Center can help brokers quote a private plan quickly, with just an accurate employee census that includes gender, birth date and salary for every employee.
The DBL Center has extensive experience rolling out PFL policies in New York since the program’s inception in 2018. Since then, we have been on the cutting edge of paid family and medical leave programs across New England, as well as in Colorado.
When you write Oregon Paid Leave through The DBL Center, your insurance wholesaler, you’ll also gain access to our state-of-the-art Broker Dashboard: Net Revenue Tracker, 24/7 customer service, and industry leading benefits experts for statutory benefits, ancillary benefits, and voluntary worksite benefits.