Oregon Hiring Laws for Small Businesses
Oregon has no sales tax, a paid family leave program, and one of the strictest non-compete regimes. The rules you need before hiring your first Oregon employee.
$14.70/hr
as of 2025
End of next business day
Restricted
Yes
Wage & Hour
Minimum wage: $14.70/hr
This is the Oregon statewide minimum as of 2025. The federal minimum ($7.25) applies where a state has no higher rate. Some cities within Oregon may set higher local minimums — check municipal ordinances.
Break requirements
Federal FLSA only — no state-specific break requirements.
Overtime
Federal FLSA requires 1.5x pay for hours over 40 in a workweek for non-exempt employees. Some states (notably California) also require daily overtime after 8 hours in a day.
Paid sick leave
Oregon has a statewide paid sick leave law. Accrual rate typically 1 hour per 30-40 hours worked, with annual usage caps.
Termination & Final Pay
Final paycheck timing
- Involuntary termination: End of next business day
- Voluntary quit: Next scheduled payday
Vacation payout on separation
Not automatically required by state law — depends on your written policy and offer letters. Written "use it or lose it" policies are generally allowed.
At-will employment
Oregon is an at-will state — either party can end employment at any time, for any legal reason (not for a discriminatory or retaliatory reason). Written employment contracts and public policy exceptions can limit this.
Non-Compete Agreements
Non-competes are enforceable only when narrow in geographic scope and duration (typically 6-12 months) and only to protect a legitimate business interest.
What still works: Non-solicitation of customers/employees, confidentiality agreements, and trade-secret protection are typically enforceable even where non-competes are not.
Contractor vs Employee Classification
IRS common-law test — control, financial arrangement, and relationship type. More flexible than ABC.
Why this matters: Misclassifying an employee as a contractor exposes you to back wages, unemployment tax, workers comp, and penalties. State enforcement has tightened significantly since 2018.
First-Employee Onboarding Checklist
- Federal: Get EIN (irs.gov), register for federal payroll (Form 941 quarterly)
- State withholding: Register with Oregon Department of Revenue
- State unemployment insurance (SUI): Register with Oregon unemployment agency and pay quarterly
- Workers' compensation: Required at 1 employee. Purchase through private market.
- New hire reporting: Report to Oregon new hire directory within 20 days of hire (federal PRWORA requirement)
- I-9 verification: Complete within 3 business days of hire (federal requirement)
- W-4: Get federal W-4 and state equivalent (if income tax applies)
- Required posters: Federal + Oregon labor law posters (available free from state DOL)
Oregon-Specific Employment Rules
The rules and quirks that make hiring in Oregon different from other states.
- Oregon minimum wage varies by geography: $14.70/hr (standard), $15.95 (Portland metro), $13.70 (non-urban counties), indexed annually.
- Oregon Paid Leave provides up to 12 weeks paid family/medical leave, funded by shared employee/employer contributions.
- Oregon Sick Time law requires 40 hours annual paid sick leave (employers with 10+; 6+ in Portland).
- Oregon restricts non-competes: only enforceable for salaried employees, must be provided 2 weeks before start, and cannot exceed 12 months.
- Oregon's final paycheck for involuntary termination is due by end of next business day.
Reference only — not legal advice.
Employment law changes frequently and turns on facts. For specific hiring decisions, terminations, or contractor classifications, consult a Oregon-licensed employment attorney. City-level rules (Seattle, NYC, SF, etc.) may add requirements beyond state law.