What Are the Oregon PTO Laws? (w/Examples) + FAQs

Oregon does not force private employers to give vacation or general paid time off, but it does require paid sick time, paid family and medical leave, and full payout of earned wages at separation under a strict wage-and-hour framework. The problem sits inside Oregon Revised Statutes Chapter 652, ORS 653.601 to 653.661 (the Oregon Sick Time Law), and the Paid Leave Oregon program enforced by the Bureau of Labor and Industries. When employers misclassify PTO, refuse to pay out accrued balances, or deny statutory sick leave, workers can file a wage claim and recover unpaid wages plus a penalty of up to 30 days of wages under ORS 652.150.

A 2024 U.S. Bureau of Labor Statistics report found that 79% of private-industry workers had access to paid sick leave, yet BOLI still opened more than 2,100 wage-claim investigations involving Oregon PTO and final-pay disputes that same year.

Here is what you will learn in this guide:

• 📜 How Oregon’s sick time statute, Paid Leave Oregon, and OFLA interact in 2026
• 💰 When unused vacation and PTO must be paid out at termination
• 🏢 How employer size (under 10, 10–24, 25+, 50+) changes your rights
• ⚖️ How to file a BOLI wage claim and recover 30-day penalty wages
• 🛑 The most common PTO mistakes Oregon workers and employers make

The Federal Baseline for PTO

Federal law sets the floor, and it is a low one. The Fair Labor Standards Act does not require private employers to offer any paid vacation, paid sick leave, or paid holidays. The U.S. Department of Labor confirms that paid time off is a matter of agreement between the employer and the employee.

The Family and Medical Leave Act gives eligible workers up to 12 weeks of unpaid, job-protected leave for serious health conditions, a new child, or a qualifying military event. FMLA only covers employers with 50 or more employees within a 75-mile radius. An employee must also have worked 1,250 hours in the past 12 months to qualify.

Because federal law does not require payment, every protection beyond unpaid FMLA leave comes from state statute, local ordinance, or a company policy. Oregon stacks several layers of paid and unpaid leave on top of that federal floor. The consequence of ignoring this layering is simple: an employer that follows only the FLSA will violate Oregon law almost immediately.

A common misconception is that a small Oregon business is “exempt” from all leave laws because it falls under FMLA’s 50-employee trigger. That is wrong, because Oregon’s Sick Time Law covers employers of every size, and Paid Leave Oregon covers nearly every worker regardless of employer headcount.

A named example helps. Marisol, a cashier at a 12-employee bookstore in Bend, does not qualify for federal FMLA. She still earns protected paid sick time under ORS 653.606, and she can still apply for Paid Leave Oregon benefits when her mother is hospitalized. Missing this layering costs employers thousands in back wages and civil penalties.

Oregon’s Core PTO Framework

Oregon law splits paid time off into three legal buckets: earned sick time, Paid Leave Oregon benefits, and voluntary vacation or general PTO. Each bucket has its own rules, its own funding source, and its own enforcement path.

Oregon Sick Time Law (ORS 653.606)

The Oregon Sick Time Law requires every employer in the state to provide at least 40 hours of protected sick time per year. Employers with 10 or more employees (6 or more in Portland) must make that time paid. Smaller employers must still allow the time, but it can be unpaid.

Workers accrue one hour of sick time for every 30 hours worked, beginning on the first day of employment. The consequence of denying statutory sick leave is civil: an employee can file a complaint with BOLI and recover lost wages, a $1,000 civil penalty per violation under ORS 653.256, and attorney fees.

A real example shows the impact. Derrick, a line cook at a Portland diner with 8 employees, takes two paid sick days to recover from the flu. Because Portland’s employer size trigger is 6, his employer must pay those hours at his regular rate. Refusing payment would trigger a BOLI investigation.

A common misconception is that sick time “expires” at year-end. In reality, unused sick time carries over up to 40 hours, although the employer may cap annual use at 40 hours. Treating accrued sick time as lost at year-end is one of the most frequent employer mistakes in Oregon.

Paid Leave Oregon

Paid Leave Oregon is a state-run insurance program funded through payroll contributions. The 2026 contribution rate is 1% of wages, split 60/40 between workers and employers with 25 or more employees. Employers with fewer than 25 employees are not required to pay the employer share, though they must still collect the employee share.

Eligible workers can receive up to 12 weeks of paid leave per year (14 weeks for pregnancy-related conditions) for family, medical, or safe-leave reasons. The 2026 maximum weekly benefit is $1,568.60, which is 120% of the state average weekly wage under ORS 657B.050. Workers qualify after earning at least $1,000 in subject wages during the base year.

A named example: Priya, a software engineer in Hillsboro, takes 10 weeks of paid leave after her son is born. She receives roughly 100% of her weekly wage up to the cap because her earnings fall below 65% of the state average. Her job is protected if she has worked for the employer at least 90 days.

A common misconception is that Paid Leave Oregon replaces OFLA. It does not. The two programs overlap but cover different events, and employers must track both concurrently.

Oregon Family Leave Act (OFLA)

The Oregon Family Leave Act was amended in 2024 through Senate Bill 1515 to avoid duplication with Paid Leave Oregon. As of July 1, 2024, OFLA is narrowed to cover sick child leave, bereavement leave, and pregnancy disability leave beyond the Paid Leave Oregon framework. Parental, family-care, and serious-health-condition leave now run through Paid Leave Oregon instead.

OFLA still applies to Oregon employers with 25 or more employees. An employee qualifies after 180 days of employment and at least 25 hours of work per week on average. The leave itself is unpaid job-protected leave, though workers may stack paid sick time or accrued vacation on top.

A real example: Theo, a warehouse supervisor in Salem, takes two weeks of bereavement leave after his father dies. OFLA protects his job, and he uses accrued vacation to make those weeks paid. Without OFLA, his employer could fire him for missing work.

A common misconception is that OFLA was repealed. It was not. It was narrowed, and misreading that change leads employers to deny protected leave they still owe.

Vacation and General PTO Rules in Oregon

Oregon does not require private employers to offer any vacation or general PTO. If the employer chooses to offer it, however, the BOLI vacation pay guidance treats earned vacation as a wage once the terms of the policy are satisfied. That single rule drives most PTO lawsuits in the state.

When PTO Becomes a Wage

Earned vacation becomes a wage when an employee meets every condition in the written policy. Oregon courts have repeatedly held, including in Russell v. U.S. Bank, that an employer cannot retroactively strip vested PTO. The consequence of trying is exposure to unpaid-wage claims, the 30-day penalty under ORS 652.150, and attorney fees under ORS 652.200.

A plain-English explanation helps: if the handbook says “employees accrue 10 hours of vacation per month,” the employee owns those hours the moment they are booked to the ledger, subject only to whatever the policy says about payout. A common misconception is that the employer can delete the balance by rewriting the policy. Oregon treats that as wage theft.

A named example: Linda, a medical assistant in Eugene, accrued 80 hours of PTO under a 2024 policy. In 2026 her employer adopts a new policy that zeroes out old balances. Because the 80 hours vested under the old policy, the employer still owes her that balance at her current wage rate.

Use-It-or-Lose-It Policies

Oregon permits “use-it-or-lose-it” policies, but only when the policy is in writing, distributed in advance, and gives the employee a reasonable chance to use the time. The consequence of a vague or mid-year policy change is that BOLI will treat the forfeited hours as an unpaid wage.

A common misconception is that any cap is enforceable. Caps that create an impossible-to-use balance, or policies applied only to departing employees, are routinely struck down. Employers should date every handbook revision and keep signed acknowledgments.

PTO Payout at Termination

Under ORS 652.140, all earned and unpaid wages are due on the next business day after a discharge. If the employee quits with 48 hours’ notice, the wages are due on the last day worked. If the employee quits without notice, wages are due within five business days or the next regular payday, whichever comes first.

Accrued vacation counts as a wage only if the company policy or contract promises payout. Unlike California, Oregon allows a written policy that explicitly says “unused vacation is forfeited at separation,” and courts will enforce it. The consequence of silence in the policy, though, is that BOLI will presume the vacation is payable.

A named example: Marcus, a retail manager in Portland, is fired on a Friday with 60 hours of accrued PTO. His handbook says nothing about forfeiture. His final check, including the PTO, is due Monday. If the employer pays only the regular wages, Marcus can sue for the PTO plus up to 30 days of penalty wages at his regular rate.

Scenario Tables

Below are three common PTO scenarios Oregon workers face, with the legal consequence mapped to each.

Scenario 1: Termination With Unused PTO

Scenario 2: Denied Paid Sick Time

Scenario 3: Paid Leave Oregon Claim

Employer Size Tiers

Oregon’s leave rules stack differently depending on how many workers the employer has. Misreading a headcount is the single fastest way to land on a BOLI docket.

Under 10 Employees (Under 6 in Portland)

Small employers must still allow protected sick time, but it can be unpaid. They still withhold Paid Leave Oregon contributions from worker wages, yet they do not owe the employer share. OFLA does not apply at this tier, which means bereavement and sick-child leave are not mandated.

The consequence of ignoring the Paid Leave Oregon employee-side withholding is a Department of Revenue assessment with interest and penalties. A common misconception is that “under 10” means “exempt from everything.” That is false; federal FLSA, Oregon sick time, and Paid Leave Oregon all still apply.

10 to 24 Employees (6+ in Portland)

At this tier the sick-time law becomes paid. Employers must track accrual at one hour per 30 worked and allow carryover up to 40 hours. Paid Leave Oregon contribution rules stay the same as the small-employer tier because the 25-employee threshold has not been crossed.

A named example: Rosa runs a 14-employee bakery in Medford. She must pay up to 40 hours of sick time per worker per year, and she must not retaliate against any worker who uses it. If she fires a worker for calling in sick, she faces a BOLI complaint under ORS 659A.885.

25 to 49 Employees

At 25 employees OFLA kicks in for bereavement, sick-child, and pregnancy disability leave. Paid Leave Oregon requires the full employer-side contribution, which in 2026 is 0.4% of covered wages. OFLA job protection attaches after 180 days of work averaging 25 hours per week.

The consequence of missing OFLA at this tier is an unlawful-employment-practice claim under ORS 659A.183. A common misconception is that OFLA is triggered by the same 50-employee threshold as FMLA. It is not. OFLA’s trigger is 25.

50 or More Employees

At 50 employees federal FMLA overlaps with OFLA and Paid Leave Oregon. Employers must track leave concurrently and give workers the most generous benefit available. FMLA itself is unpaid, but it can run at the same time as Paid Leave Oregon benefits if the reason qualifies under both.

A named example: Jonathan, an HR director at a 300-employee Portland manufacturer, runs FMLA and Paid Leave Oregon concurrently for a worker recovering from surgery. That stack gives the worker up to 12 weeks of job protection under FMLA, up to 12 weeks of paid benefits from the state, and continued health insurance.

Final Paycheck Rules Tied to PTO

Final-pay timing rules in Oregon are some of the strictest in the country. The rules live in ORS 652.140 and are enforced through the wage-claim process described in ORS 652.330.

Timing by Separation Type

When the employer fires or lays off the worker, all wages including payable PTO are due by the end of the next business day. When the worker quits with at least 48 hours’ notice, wages are due on the final workday. When the worker quits without notice, wages are due within five business days or the next regular payday, whichever comes first.

The consequence of missing any of these deadlines is a penalty of up to eight hours of wages per day, capped at 30 days. That penalty runs even if the underlying unpaid amount is small. A common misconception is that a $50 shortage triggers only a $50 penalty. It can easily trigger thousands.

Penalty Wages Under ORS 652.150

ORS 652.150 imposes penalty wages equal to the worker’s regular hourly wage times eight, multiplied by each day the wages remain unpaid, up to 30 days. The penalty can be reduced if the employer pays within 12 days of a written demand, but only if the failure was not willful.

A named example: Amelia, a bartender in Ashland earning $22 an hour, is fired with $400 of PTO owed. Her employer ignores her for 20 days. Her penalty wages alone equal 20 × 8 × $22 = $3,520, on top of the unpaid $400 and attorney fees.

A common misconception is that the penalty applies only to willful violations. Oregon applies it to all late wages, with the willfulness question affecting only the reduction provision.

Filing a BOLI Wage Claim

Workers who are denied PTO payout, sick time, or final wages can file a wage claim with the BOLI Wage and Hour Division. The process is free, does not require a lawyer, and has a statute of limitations of generally six years for contractual wage claims and three years for statutory minimum-wage claims under ORS 12.080.

Step-by-Step Process

Start by downloading the BOLI Wage Claim Form (Form WH-2). Fill in the employer’s legal name, the dates worked, and the amount of unpaid PTO or wages. Attach pay stubs, the employee handbook, and any emails about the PTO dispute.

Submit the form by mail or in person at a BOLI field office. A BOLI investigator contacts the employer, reviews records, and can order payment. If the employer refuses, BOLI can refer the claim to the Oregon Department of Justice for civil prosecution.

What BOLI Can Recover

BOLI can recover unpaid wages, penalty wages under ORS 652.150, civil penalties, and in some cases attorney fees. The agency cannot award emotional-distress damages, so workers alleging retaliation sometimes file a separate civil lawsuit under ORS 659A.885.

A named example: Carlos, a construction laborer in Gresham, filed a wage claim for $1,200 of unpaid PTO. BOLI ordered the employer to pay the $1,200 plus $4,800 in penalty wages. The employer settled within 30 days to avoid a court judgment.

Mistakes to Avoid

Oregon PTO mistakes compound because every error either violates a statute or creates a wage claim. Here are the most frequent ones.

• Treating sick time as unpaid at a 12-employee shop. The statute requires paid sick time at 10 or more employees, and the consequence is a BOLI complaint with up to $1,000 in penalties per violation.
• Zeroing out accrued vacation by rewriting the handbook. Oregon treats vested vacation as a wage, and retroactive forfeiture triggers the 30-day penalty.
• Paying the final check on the next regular payday after firing a worker. ORS 652.140 requires next-business-day payment after discharge, not the next scheduled cycle.
• Skipping Paid Leave Oregon contributions for part-time workers. Contributions apply to all subject wages, and missed contributions draw Department of Revenue interest and penalties.
• Denying OFLA bereavement leave at a 26-employee office. OFLA applies at 25 employees, and denial is an unlawful employment practice under ORS 659A.183.
• Retaliating against a worker who used protected sick time. Retaliation exposes the employer to reinstatement orders, back pay, and civil penalties.
• Assuming a signed at-will agreement waives PTO payout. At-will status does not override wage statutes, and any waiver of statutory rights is void.
• Failing to provide written notice of sick-time accrual balances. Quarterly notice is required, and the absence of notice is evidence of a violation.
• Classifying a worker as an independent contractor to avoid Paid Leave Oregon. Misclassification carries both tax and wage-law consequences.
• Ignoring Portland’s lower 6-employee threshold. Portland employers at 6 workers owe paid sick time even though the state threshold is 10.

Do’s and Don’ts for Oregon Employers

Every Oregon employer should build a written PTO policy, audit it annually, and train managers on the mechanics of accrual and payout.

• Do put every PTO rule in writing because oral policies are nearly impossible to defend at BOLI.
• Do pay accrued vacation at separation unless the policy clearly says otherwise, because silence is read against the employer.
• Do track sick time accrual from day one because the statute starts the clock on hire.
• Do display the Paid Leave Oregon workplace poster because posting is mandatory.
• Do keep payroll records for at least six years because BOLI can audit that far back.

And here is what to avoid.

• Don’t deduct PTO advances from a final paycheck without written authorization, because unauthorized deductions violate ORS 652.610.
• Don’t adopt a use-it-or-lose-it rule mid-year, because retroactive application forfeits already-vested hours.
• Don’t require a doctor’s note for a one-day sick absence, because the statute limits documentation to absences over three consecutive days.
• Don’t run OFLA and Paid Leave Oregon as if they duplicate, because the 2024 amendments split their coverage.
• Don’t tell workers that salaried status removes their sick-time rights, because the law covers salaried exempt workers too.

Pros and Cons of Oregon’s PTO System

Oregon’s framework is among the most worker-protective in the country, but that protection carries administrative cost.

• Pro: Workers receive paid sick time regardless of employer size in most cases, which reduces public-health risks.
• Pro: Paid Leave Oregon gives near-universal access to paid family and medical leave funded through shared contributions.
• Pro: ORS 652.150 penalty wages create a strong deterrent against late final paychecks.
• Pro: OFLA covers bereavement leave, which federal law does not.
• Pro: BOLI provides a free, accessible enforcement path without requiring an attorney.

The drawbacks.

• Con: Overlapping statutes (OFLA, Paid Leave Oregon, FMLA) create tracking complexity for HR teams.
• Con: Paid Leave Oregon contributions raise payroll costs for employers with 25 or more workers.
• Con: The 30-day penalty wage can dwarf the underlying unpaid amount, surprising small employers.
• Con: Use-it-or-lose-it rules are allowed but easy to misdraft, leading to litigation.
• Con: Portland and state thresholds differ, which confuses multi-site employers.

Key Entities You Should Know

Several agencies and laws intersect in any Oregon PTO question. Knowing the players saves time during a dispute.

The Bureau of Labor and Industries enforces wage-and-hour, civil rights, and sick-time laws. The Oregon Employment Department runs Paid Leave Oregon. The Oregon Department of Revenue collects Paid Leave Oregon contributions. The U.S. Department of Labor Wage and Hour Division enforces FMLA and the FLSA.

Named cases shape the rules. Migis v. AutoZone, Inc. confirmed that penalty wages under ORS 652.150 are mandatory when wages are willfully withheld. Russell v. U.S. Bank confirmed that vested vacation cannot be stripped retroactively.

Recent Legal Changes for 2025–2026

The 2024 legislature reshaped the OFLA-Paid-Leave overlap through SB 1515. The 2025 session adjusted the Paid Leave Oregon contribution rate to 1% and fine-tuned the small-employer grant program. The 2026 contribution notice confirms the rate held steady into 2026.

BOLI updated its sick-time rule (OAR 839-007) in early 2025 to clarify accrual carryover and frontloading. Employers that frontload 40 hours on January 1 are not required to track accrual during the year, but they cannot claw back unused hours. The consequence of a clawback is that BOLI will order reinstatement of the balance and impose penalties.

A common misconception is that frontloading ends carryover obligations. It does not if the employer later reverts to accrual; the unused frontloaded hours still roll over.

FAQs

Does Oregon require paid vacation?

No. Oregon law does not require private employers to offer paid vacation, but once offered, earned vacation is treated as a wage under ORS 652.140 and the employer’s own policy controls payout.

Must Oregon employers pay out unused PTO at termination?

Yes. Oregon employers must pay out unused PTO at termination if the written policy or contract promises it or is silent, because BOLI treats silent policies as promising payout at the employee’s final wage rate.

Is paid sick leave required in Oregon?

Yes. Paid sick leave is required for Oregon employers with 10 or more employees, or 6 or more in Portland, under ORS 653.606 at one hour per 30 hours worked up to 40 hours per year.

Can an Oregon employer enforce use-it-or-lose-it?

Yes. An Oregon employer can enforce use-it-or-lose-it vacation if the policy is in writing, distributed in advance, applied prospectively, and gives employees a fair chance to use the time before forfeiture.

Does Paid Leave Oregon cover part-time workers?

Yes. Paid Leave Oregon covers part-time workers who earned at least $1,000 in subject wages during the base year, regardless of how many hours per week they average or how many employers they worked for.

Is OFLA still in effect after 2024?

Yes. OFLA is still in effect but narrowed to bereavement, sick-child, and pregnancy disability leave after SB 1515’s July 2024 amendments, which pushed parental and serious-health-condition leave into Paid Leave Oregon.

Can an employer count PTO against Paid Leave Oregon benefits?

No. An employer cannot reduce a worker’s Paid Leave Oregon benefit by requiring the use of accrued PTO, though workers may choose to top up their state benefit using employer-provided PTO voluntarily.

Does Oregon require bereavement leave?

Yes. Oregon requires up to two weeks of unpaid, job-protected bereavement leave per qualifying death under OFLA for employers with 25 or more employees, capped at 12 weeks of OFLA leave per year.

Can I be fired for using sick time in Oregon?

No. An Oregon employer cannot fire or discipline a worker for using protected sick time, and doing so creates a retaliation claim under ORS 659A.885 with remedies including reinstatement and back pay.

How long do I have to file a wage claim for unpaid PTO?

Yes, time limits apply: you generally have six years for contract-based wage claims and three years for statutory claims under ORS 12.080, and filing with BOLI preserves both tracks.

Are independent contractors covered by Oregon PTO laws?

No. True independent contractors are not covered by Oregon sick time, OFLA, or mandatory Paid Leave Oregon, but misclassified workers are covered and can recover unpaid benefits plus penalties.

Can Oregon employers cap PTO accrual?

Yes. Oregon employers can cap PTO accrual at a specific number of hours, provided the cap is in writing, communicated in advance, and does not operate to strip already-earned hours from the worker’s balance.