Oregon State Labor Laws for Business Owners

Oregon is located in the Pacific Northwest region of the United States. In 2023, the state had a population of approximately 4.3 million people, with an economy valued at $290 billion USD. Oregon's economy is driven by diverse sectors, including technology, manufacturing, agriculture, and forestry. Key industries like semiconductor manufacturing and sustainable agriculture play a vital role in its economic growth. Oregon fosters a business-friendly environment with incentives for industries like technology, clean energy, and agriculture, while maintaining strong labor laws for worker protection.

Minimum Wage Mandates

Oregon has a tiered minimum wage system based on geographic region. The rates below are effective July 1, 2025 through June 30, 2026. New rates for July 1, 2026 onward will be announced by April 30, 2026, based on Consumer Price Index adjustments.

Region	Hourly Rate (July 1, 2025 – June 30, 2026)
Standard counties	$15.05
Portland Metro Area	$16.30
Non-urban counties	$14.05

Standard rate applies to Benton, Clatsop, Columbia, Deschutes, Hood River, Jackson, Josephine, Lane, Lincoln, Linn, Marion, Polk, Tillamook, Wasco, Yamhill, and parts of Clackamas, Multnomah, and Washington counties outside the urban growth boundary.

Portland Metro rate applies to employees working within the urban growth boundary, including parts of Clackamas, Multnomah, and Washington counties.

Non-urban rate applies to Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa, and Wheeler counties.

Oregon does not have a separate tipped minimum wage — all workers must receive the full minimum wage regardless of tips.

Overtime Rules

Oregon requires non-exempt employees to be paid overtime for any hours worked over 40 in a workweek. The overtime rate is 1.5 times the employee's regular hourly rate. Oregon does not have daily overtime requirements, but employees working more than 10 hours in a single day in the manufacturing industry must receive overtime pay.

Alternate Workweek Agreements: Oregon allows certain industries to implement alternate workweek schedules, provided they are agreed upon through a formal process.

Exemptions: Some employees, such as administrative, executive, and professional employees, may be exempt from overtime laws if they meet specific salary and duties criteria.

Meal and Rest Breaks

Meal Breaks: Employees working over six consecutive hours are entitled to a 30-minute unpaid meal break. The break must be provided no later than five hours into the workday.

Rest Breaks: Oregon law mandates a 10-minute paid rest break for every four hours worked. Employers must schedule these breaks as close to the middle of the work period as possible.

Rules for Young Employees: Minors under the age of 18 must receive additional protections. Employees aged 14–17 are entitled to a 15-minute break for every four hours worked, and they cannot work more than eight hours per day. Employers must comply with the federal Fair Labor Standards Act (FLSA) when employing minors.

Paid Leaves and Time Off

Oregon provides several protections related to paid leave and time off.

Paid Sick Leave Laws: Oregon requires that employers provide one hour of paid sick leave for every 30 hours worked, up to 40 hours per year. Employees may use this leave for personal illness, care of a family member, or any public health emergency. Beginning January 1, 2026, employees may also use accrued sick time for blood donation through a voluntary program approved by the American Association of Blood Banks or the American Red Cross.

Accrual and Usage of Sick Leave: Sick leave accrual begins on the first day of employment, and employees can begin using it after 90 days. Unused sick leave can be carried over to the next year, but employees cannot accrue more than 80 hours of leave.

Paid Time Off Laws: Oregon does not require employers to offer paid vacation, but those who do must follow rules on accrual and usage.

Paid Leave Oregon (PLO): Oregon's Paid Family and Medical Leave program offers up to 12 weeks of paid leave for new parents, those caring for ill family members, or employees dealing with their own serious health condition. The total 2026 contribution rate is 1% of subject wages up to $184,500 per employee. Employers are responsible for 40% of the contribution, and employees for 60%. Employers with fewer than 25 employees are not required to make the employer portion but must still withhold and remit the employee portion. Beginning January 1, 2026, the Bureau of Labor and Industries (BOLI) — not the Oregon Employment Department — is the enforcement agency for PLO job protection, anti-discrimination, and retaliation provisions.

Other Leave Laws:

• Jury Duty Leave: Employers must provide time off for jury duty, though it is generally unpaid.
• Parental Leave: Oregon's Paid Leave Oregon program offers up to 12 weeks of paid leave for new parents or those caring for ill family members.
• Bereavement Leave: Employers are required to offer unpaid bereavement leave, up to two weeks.
• Voting Leave: Employees are entitled to unpaid time off to vote if their working hours don't allow them sufficient time to vote outside of work hours.

FMLA Eligibility: Oregon workers are eligible for FMLA benefits if they meet federal requirements of working 1,250 hours in the prior 12 months.

2026 Public Holidays in Oregon

Holiday	Date	Day
New Year's Day	January 1	Thursday
Martin Luther King Jr. Day	January 19	Monday
Presidents' Day	February 16	Monday
Memorial Day	May 25	Monday
Juneteenth	June 19	Friday
Independence Day	July 4 (observed July 3)	Saturday (Friday)
Labor Day	September 7	Monday
Columbus Day	October 12	Monday
Veterans Day	November 11	Wednesday
Thanksgiving Day	November 26	Thursday
Christmas Day	December 25	Friday

Employer Tax Obligations

Oregon employers should be aware of the following payroll tax rates and contribution requirements for 2026:

Tax / Contribution	Rate	Taxable Wage Base	Notes
Unemployment Insurance (UI)	0.9%–5.4%	$56,700	Experienced employer rate range under Schedule 3; wage base increased from $54,300 in 2025
New Employer UI Rate	2.4%	$56,700	For employers with less than 12 months of experience
Paid Leave Oregon – Employer share	0.4%	$184,500	Employers with 25+ employees must contribute; smaller employers exempt from employer share
Paid Leave Oregon – Employee share	0.6%	$184,500	All employees contribute regardless of employer size
Statewide Transit Tax	0.10%	No cap	Employee-paid payroll tax for transit funding
Workers' Benefit Fund	Varies	N/A	Assessment per hours worked; rate set annually by DCBS

State Income Tax: Oregon has a graduated state income tax with rates ranging from 4.75% to 9.9%. Oregon does not have a general sales tax, so income and payroll taxes form the primary revenue base.

Additional Local Taxes: The Portland Metro area has additional taxes including the Metro Supportive Housing Services (SHS) tax of 1% on taxable income over $125,000 (single) or $200,000 (joint), and the Multnomah County Preschool for All (PFA) tax of 1.5% on income over $125,000 (single) or $200,000 (joint), increasing to 3% over $250,000/$400,000.

Exempt vs. Non-Exempt Classification

Exempt Employees:

• Salary Basis: Exempt employees must be paid a salary, not hourly wages.
• Salary Level: The federal minimum salary threshold for exempt employees is $684 per week ($35,568 per year). Oregon follows the federal FLSA standard.
• Duties Test: To be classified as exempt, employees must primarily perform executive, administrative, or professional duties. Oregon's requirements align closely with federal standards, but the burden of proving exempt status falls on the employer.

Non-Exempt Employees:

• Hourly Pay Rules: Non-exempt employees must be paid at least the state or local minimum wage for every hour worked.
• Overtime Wage Rules: Non-exempt employees are entitled to overtime pay at 1.5 times their regular hourly rate for hours worked over 40 per week.

Equal Pay Act

The federal Equal Pay Act requires that men and women be paid equally for substantially similar work. Oregon's Equal Pay Act expands this to include protections based on race, ethnicity, sexual orientation, and other protected categories. Oregon's law also prohibits employers from asking about salary history during the hiring process.

Employers must comply with Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, religion, sex, or national origin.

New and Notable Laws for 2025–2026

• Unemployment Insurance for Striking Workers (effective January 1, 2026): Oregon enacted UI benefits for striking workers. Eligible workers can receive up to 10 weeks of benefits after a two-week waiting period. Oregon is the first state to extend these benefits to eligible striking public employees.
• Paid Sick Leave for Blood Donation (effective January 1, 2026): Workers may use accrued sick time for blood donation through approved programs.
• Construction Workers' Wage Protection (effective January 1, 2026): Property owners and direct contractors are jointly and severally liable for unpaid wages owed to unrepresented employees of subcontractors at any tier on covered construction projects.
• Payroll Disclosure Requirements (effective January 1, 2026): Employers must provide new detailed information to help employees interpret their pay statements, including descriptions of all pay and deduction codes.
• Paid Leave Oregon Enforcement Transfer (effective January 1, 2026): BOLI is now the enforcement agency for PLO job protection, anti-discrimination, and retaliation provisions (previously handled by the Oregon Employment Department).
• Noncompete Ban for Healthcare Workers (effective June 9, 2025): SB 951 and HB 3410 make most noncompetition agreements between licensed medical professionals and their employers void and unenforceable, applying both prospectively and retroactively.
• Age Inquiry Restrictions in Hiring (effective late September 2025): Employers are prohibited from requesting an applicant's age, date of birth, or educational attendance/graduation dates before an initial interview or conditional job offer.

Rules for Hiring and Firing Employees in Oregon

At-Will Employment: Oregon is an at-will employment state, meaning either the employer or the employee can terminate the employment relationship at any time without notice, as long as the reason is lawful.

Anti-Discrimination Laws: Oregon's anti-discrimination laws prohibit employment discrimination based on race, religion, gender, sexual orientation, age, disability, and other protected categories.

Equal Employment Opportunity (EEO) Act: Oregon follows both state and federal EEO regulations to ensure that employers do not discriminate in hiring, promotions, or firing.

Background Verification Rules: Oregon's "ban-the-box" law restricts employers from asking about criminal history on initial job applications. Background checks are allowed later in the hiring process.

Work Eligibility Verification Rules: Employers must comply with federal I-9 verification requirements to ensure work eligibility for all employees.

Final Paychecks: Employers are required to issue final paychecks within five business days after termination or by the next payday, whichever is sooner.

Unemployment Compensation Rules: Employees terminated without cause may be eligible for unemployment benefits if they meet the state's eligibility criteria.

Compliance with WARN Act: Employers must provide 60 days' notice for mass layoffs or plant closures, in accordance with the federal Worker Adjustment and Retraining Notification (WARN) Act.