Hiring Employees in Oregon

Classifying Your Workers Correctly

Your company must distinguish properly between employees and independent contractors under IRS common law tests and Oregon’s “direction and control” standards. You should review behavioral control, financial control, and the overall relationship to decide if a worker belongs on payroll or should be treated as a contractor.

Oregon agencies, including the Bureau of Labor and Industries and Employment Department, can audit and reclassify workers, leading to back wages, unpaid overtime, taxes, interest, and penalties. To reduce risk, you should document each role’s duties, supervise contractors minimally, and periodically review classifications using resources like Playroll’s employee misclassification guide at https://www.playroll.com/blog/employee-misclassification-guide.

Verify Employee Work Eligibility

When you hire in Oregon, you must complete federal Form I‑9 for every employee within 3 business days of their start date. You’ll need to examine original identity and work authorization documents, such as a U.S. passport or a combination of driver’s license and Social Security card, and record the details on the form.

Oregon does not mandate E‑Verify for most private employers, but you may opt in if your company wants an additional federal check. You must keep I‑9s for at least 3 years after the hire date or 1 year after termination, whichever is later, and store them separately from general personnel files so you can respond quickly to any inspection.

Create an Employee Onboarding Process

Your onboarding process in Oregon should include a written offer letter, a completed federal Form W‑4, and any Oregon state withholding forms your payroll provider requires. You should also collect direct deposit details, obtain signed acknowledgments of your handbook and policies, and provide required notices such as wage rate, regular payday, and workers’ compensation information.

Make sure new hires receive information on benefits, harassment and discrimination policies, and how to report safety concerns under Oregon OSHA rules. Building a consistent onboarding checklist helps you stay compliant and gives you clear visibility into the total cost of hiring each Oregon employee.

Pay Frequency & Methods

Oregon requires you to establish regular paydays and pay employees at least every 35 days, with most employers choosing weekly, biweekly, or semimonthly schedules. If an employee is terminated involuntarily, you generally must pay all final wages by the end of the next business day, while employees who resign must usually be paid by the next regular payday or within 5 business days, whichever comes first.

Late or unpaid wages can trigger penalty wages of up to 30 days’ regular pay, plus potential civil penalties and attorney fees. You should clearly communicate pay periods, cutoff dates, and final pay rules in your written policies so managers handle separations correctly.

Payment Methods (How You Can Pay)

Your company can choose from several lawful wage payment methods in Oregon, but you must always ensure employees receive full, timely pay and an accurate itemized wage statement each payday.

• Payroll Check: You may pay by check as long as it is payable at full face value in cash at a bank or other established place without fees to the employee.
• Cash: You can pay wages in cash, but you must still provide a written wage statement showing hours, rates, deductions, and net pay each pay period.
• Direct Deposit (EFT): You may use direct deposit only if the employee voluntarily authorizes it, and you must offer an alternative method if they revoke consent.
• Paycards: You can pay by payroll card if employees can access their full wages at least once per pay period with no fees and receive clear disclosures of any card terms.
• Outsourced Payroll: You may outsource payroll to a third‑party provider, but your company remains responsible for compliance with Oregon wage, tax, and recordkeeping laws.

When you hire employees in Oregon, you must withhold and remit federal taxes and several state‑level payroll taxes. Your company will need to register with the Oregon Department of Revenue and the Oregon Employment Department before running payroll.

Employer Tax Contributions

As an Oregon employer, you’ll pay state unemployment insurance and may owe additional local payroll taxes depending on where your employees work. You must file returns and remit contributions on the schedule assigned by each agency.

Employee Payroll Tax Contributions

You must withhold federal income tax, Social Security and Medicare, and applicable Oregon state and local payroll taxes from employee wages. Oregon uses a progressive state income tax, and some employees may also owe statewide and local transit or leave program contributions.

Minimum Wage in Oregon

Oregon’s minimum wage is tiered by region, with different rates for the Portland metro area, the standard zone, and nonurban counties, and it is adjusted annually on July 1. Your company must confirm each employee’s work location and apply the correct regional rate for all non‑exempt hours worked.

Working Hours in Oregon

Oregon does not cap daily or weekly hours for most adults, but you must pay at least minimum wage for all hours worked and provide required rest and meal periods. Certain industries, such as manufacturing and mills, face additional daily overtime or maximum hours rules that your company must review before scheduling long shifts.

Overtime in Oregon

For most non‑exempt employees, you must pay overtime at 1.5 times the regular rate for all hours worked over 40 in a workweek. Some manufacturing and mill workers may also earn daily overtime after 10 hours in a day, and Oregon law prohibits “comp time” in place of required overtime pay in the private sector.

Offering competitive benefits in Oregon typically includes health insurance, retirement plans, and paid time off, especially if you want to attract talent in the Portland metro area. If you average 50 or more full‑time employees nationwide, the federal ACA requires you to offer affordable health coverage or face potential penalties.

Mandatory Leave Policies in Oregon

Paid Time Off in Oregon

Oregon law does not require general vacation or PTO, but many employers offer it to stay competitive, especially in professional and tech roles. If your company provides PTO, you should put accrual rules, caps, and payout policies in writing and apply them consistently.

Oregon generally allows you to decide whether to pay out unused vacation at termination, but your policy or contract will control once you promise a benefit. You should also coordinate PTO with Oregon’s paid sick time and Paid Leave Oregon so employees understand which bank to use for different absences.

Maternity & Paternity Leave in Oregon

Oregon employees may qualify for job‑protected parental leave under the Oregon Family Leave Act and for wage replacement through Paid Leave Oregon. Eligible employees can take leave for the birth, adoption, or foster placement of a child, subject to length‑of‑service and hours‑worked requirements.

Your company must maintain health benefits during protected leave and reinstate employees to the same or an equivalent position when they return. You should update your handbook to explain how state leave programs interact with any employer‑provided parental leave or short‑term disability benefits.

Sick Leave in Oregon

Oregon’s paid sick time law requires most employers to provide up to 40 hours of protected sick time per year, accrued at least 1 hour for every 30 hours worked. If you have 10 or more employees statewide (or 6 or more in Portland), that sick time must be paid; smaller employers can provide it unpaid.

Employees can use sick time for their own illness, a family member’s health needs, certain public health emergencies, and safe leave related to domestic violence or harassment. Your company must track accruals, show balances on pay statements or another regular document, and allow carryover within statutory limits unless you front‑load the full annual amount.

Military Leave in Oregon

Under federal USERRA and Oregon law, you must provide unpaid, job‑protected leave for employees performing military service, including training and active duty. You must reinstate eligible employees to the same or comparable position with the same seniority, status, and benefits when they return.

Some Oregon employers choose to offer differential pay or continued benefits during longer deployments as a competitive practice. You should train managers not to discriminate based on military status and to handle schedule changes promptly when employees receive orders.

Jury Duty in Oregon

Your company must allow employees time off to serve on a jury in Oregon and may not discipline or terminate them for complying with a summons. State law does not require private employers to pay for this time, but you must let employees use available PTO if your policy allows.

You should ask for a copy of the summons for scheduling purposes and clearly explain in your handbook whether jury duty time is paid or unpaid. Any attendance or performance metrics should exclude absences due to mandatory jury service.

Voting Leave in Oregon

Because Oregon conducts elections primarily by mail, state law does not generally require employers to provide specific paid voting leave. However, your company should avoid practices that interfere with employees’ ability to receive, complete, and return their ballots on time.

Some employers still choose to offer flexible scheduling around election deadlines as part of their culture and civic engagement efforts. If you adopt such a policy, document it clearly and apply it consistently across your Oregon workforce.

Bereavement Leave in Oregon

Under the Oregon Family Leave Act, eligible employees of covered employers may take limited unpaid bereavement leave following the death of a family member. This leave is job‑protected and must be granted when statutory conditions are met.

Many Oregon employers supplement the legal minimum with a small bank of paid bereavement days or additional discretionary time off. You should define who qualifies as a family member, how much leave is available, and any documentation requirements in your written policies.

Termination Process

Oregon is an at‑will employment state, but you should still follow a structured termination process that includes documenting performance issues, applying policies consistently, and avoiding discriminatory motives. When you decide to end employment, you must calculate all final wages accurately, including earned overtime and any contractually owed bonuses or commissions.

Notice Period

Oregon law does not require employers or employees to give advance notice before ending an at‑will employment relationship, unless a contract or collective bargaining agreement says otherwise. However, you should build reasonable internal notice expectations for resignations and layoffs to help manage final pay deadlines and transitions.

Severance

Severance pay is not required under Oregon law, but many employers offer it in layoffs or negotiated separations in exchange for a release of claims. If you provide severance, you should put terms in a written agreement that complies with federal and state rules on waivers, age discrimination, and payment timing.