Oregon Passes 12-week Paid Family Leave

Paid leave has been on the national legislative agenda for quite some time. While many people are in agreement for paid family leave policies, most disagree on how these benefits should be funded. While nearly 25% of U.S. workers with moderate to high incomes have access to paid family leave, that number drops to a staggering 6% for low-income Americans. (The American Enterprise Institute, 2018)

The recent policies adopted by Oregon has stimulated new momentum in the topic. Early this month (July 2019), Oregon governor Katy Brown signed into law a paid family and medical leave policy that covers 12-weeks annually for all workers who make over $1,000 annually. The law will be funded through a payroll tax (not to exceed 1% of employee wages) where employees pay in 60% of the total rate, and employers will cover the remaining 40%. Small businesses are exempt from paying the tax, which will be effective in January 2023. This makes Oregon the first state in America to offer 100% wage replacement for low-wage workers taking leave for family, medical, or safety reasons.

As wage equality, healthcare, and employment rates continue to be critical topics; understandably, family and medical leave will remain equally at the forefront of discussion. Likewise, as more Americans consider these type of benefits when pursuing employment, employers must also consider more than just hourly/salary based compensation as they seek to attract and retain talent in a tight labor market.


Reference:

Bradbury, R. (2019, July 03). Oregon passes 12-week paid family leave policy. Retrieved from https://www.hrdive.com/news/oregon-passes-12-week-paid-family-leave-policy/558106/

The American Enterprise Institute. (2018, September). The AEI-Brookings Working Group Report on Paid Family and Medical Leave. Retrieved from https://www.aei.org/wp-content/uploads/2018/09/The-AEI-Brookings-Working-Group-Report-on-Paid-Family-and-Medical-Leave.pdf