Paid Leave Oregon, which begins to take effect January 1, 2023, is a state-run insurance program that provides eligible employees paid time off for family, medical, and sick leave reasons. Paid Leave Oregon is funded by employers and employees. Contribution requirements under Paid Leave Oregon begin on January 1, 2023.
The Oregon Employment Department (OED) recently clarified several tax questions for Paid Leave Oregon:
- If an employer chooses to pay the employee contribution of Paid Leave Oregon on behalf of the employee, that amount will be taxable.
- The Paid Leave Oregon benefit employees receive from the Oregon Employment Department will likely be taxed; however, it will depend on the type of leave being taken. The details have yet to be determined.
- Employees will receive a 1099 Form for benefits received under the Paid Leave Oregon Plan.
The OED has also stated that any wages employees earned in 2022 but were paid in 2023 are subject to the contributions. It is important to note that this information diverges from OED’s previous position, which was that only wages employees earned beginning January 1, 2023 would be subject to the contribution.
For more information and FAQs about Paid Leave Oregon, be sure to visit our member website.
If you have any questions, please reach out to us!