Summarized below are newly effective or soon to be effective laws and important reminders for Oregon employers. Employers should review their current policies, practices, and procedures to ensure they are aligned with these changes.
Transparency in Deductions – SB 906
Effective January 1, 2026, in addition to the current requirement to provide employees with itemized statements each payday, employers must provide all new employees with a written explanation of the earnings and deductions shown on their pay stubs at the time of hire. The explanation, which must be updated each year by January 1, must include (among other things):
- Employer’s established pay periods
- All pay rates that employee may be eligible for (e.g., hourly, salary, commissions, shift differentials)
- All pay codes, including definitions and descriptions
- All benefit deductions and contributions
- All deductions that may apply and purpose of those deductions
- Payroll codes with a detailed description
- Allowances for minimum wage, if applicable
Employers can fulfill this by providing accessible documentation (e.g., via email, intranet, or physical posting). BOLI has issued a model notice that employers may use, available in English and Spanish. BOLI: Paycheck Deductions: For Workers: State of Oregon
Non-compliance may result in civil penalties of up to $500. Employers should prepare by compiling detailed payroll information and updating it annually by January 1.
BOLI Time Limits – HB 2957
Effective June 24, 2025, employers are prohibited from entering into agreements with employees that shorten the statute of limitations for claims overseen by BOLI (e.g., state wage and hour claims and discrimination, harassment, and retaliation claims). Employers should review their agreements and policies to ensure they do not limit employees’ time to file a claim.
In addition, HB 2957 changed the amount of time in which an employee/complainant must file a lawsuit following BOLI issuing a notice of rights. Formerly, complainants had 90 days to file suit following BOLI’s notice of rights, but now the time an employee has to file a lawsuit depends on how BOLI resolves the complaint and the remaining applicable statute of limitations (e.g., 5 years for most state discrimination, harassment, and retaliation claims):
- If BOLI finds substantial evidence of a violation or does not investigate, then complainant can file a lawsuit:
- Within 90 days after BOLI’s right-to-sue letter if there are 90 days or less left on the statute of limitations, or
- Before the statute of limitations expires if more than 90 days remain.
- If BOLI investigates and does not find substantial evidence of a violation, then complainant can file a lawsuit:
- Within one year after BOLI’s notice if more than one year remains on the statute of limitations,
- Before the statute of limitations expires if there are between 90 days and one year left, or
- Within 90 days after the notice if less than 90 days remain on the statute of limitations.
Age Discrimination Protections – HB 3187
Effective September 26, 2025, prior to an initial interview or making a conditional offer of employment (if no initial interview), employers are prohibited from requesting an applicant’s age, date of birth, or dates of attendance or graduation from educational institutions. This information can only be requested prior to an initial interview or a conditional offer of employment if the information is necessary to verify bona fide occupational qualifications or to comply with applicable laws or regulations. HB 3187 also brought apprenticeship programs under the same anti-discrimination rules as other employers by removing prior allowances for age limits in apprentice program selection.
Employers should review and update job applications, applicant tracking systems, apprenticeship programs, and other processes, including the timing of background checks or other verifications that require date of birth or institution attendance and graduation dates.
Paid Leave Oregon – SB 69
Employers can now require an employee to provide documentation from the employee’s provider that the employee is able to return to work following medical leave under PLO. This policy must be uniformly applied by the employer. Employers can also require employees to report periodically on the employee’s status and intention to return to work while on PLO. The Employment Department can now disclose the benefit amounts that employees are receiving while on PLO.
Federal “One Big Beautiful Bill Act”
“No Tax on Tips” allows employees and self-employed individuals to deduct up to $25,000 of tip income from federal income tax for tax years 2025 through 2028.
- The individual must work in an occupation that customarily and regularly receives tips. The IRS is drafting regulations identifying these occupations. Here is a link to the current draft regulations. Federal Register: Occupations That Customarily and Regularly Received Tips; Definition of Qualified Tips
- The deduction only applies to voluntary tips received. Mandatory service charges and mandatory tips do not qualify. Employers will be required to provide new information reports to the IRS and employees reporting the appropriate amount of tips and occupation.
- The deduction applies to federal taxes but not state tax or Social Security or Medicare taxes.
“Deduction for Overtime Pay” allows employees to deduct up to $12,500 of qualified overtime pay ($25,000 if married filing jointly) from federal income tax for tax years 2025 through 2028.
- The deduction only applies to FLSA overtime pay (over 40 hours/week).
- The deduction is limited to the “one-half” of the time and one-half overtime pay. For example, if the employee worked 50 hours and was paid $30/hour, then the deduction would be for $15/hour times 10 hours.
- The deduction applies to federal taxes but not state tax or Social Security or Medicare taxes.
For more information, please contact our employment law attorneys, Amanda Walkup, Mario Conte, and Elizabeth Stubbs.This summary provides general information and should not be construed as legal advice or a legal opinion on any specific facts or circumstances. If you have specific legal questions, you are urged to consult with your attorney concerning your own situation.