Oregon Payroll Laws & Requirements

Oregon raises its minimum wage on July 1, not January 1, and it sets three rates at once depending on the county where the work happens. A grocery chain with stores in Portland, Bend and Pendleton pays three different floors. That calendar and map are where Oregon payroll gets tricky. Add paid rest breaks, final pay due by the end of the next business day, and Portland-area income taxes that land on high earners' checks, and the state scores 5 out of 5 on our Payroll Complexity Score, with five of seven factors.

Minimum Wage in Oregon

The Oregon minimum wage runs from July 1, 2026 to June 30, 2027 in three tiers:

• Portland metro: $16.80. This covers the parts of Clackamas, Multnomah and Washington counties inside the urban growth boundary.
• Standard: $15.55. This covers counties including Benton, Deschutes, Jackson, Lane, Marion and Yamhill, plus the rest of the three metro counties.
• Nonurban: $14.55. This covers 18 counties, including Baker, Coos, Douglas, Klamath, Malheur and Umatilla.

Oregon bans tip credits, so a server at a Salem restaurant earns the full $15.55 before tips. The next rate follows the March-to-March change in consumer prices, rounded to the nearest 5 cents. Portland stays $1.25 above the standard rate and nonurban counties $1 below it.

Oregon ties the exempt salary to the regional minimum wage times 2,080 hours. All three results fall below the federal $684 a week, so the federal floor is the one that applies.

Overtime Rules in Oregon

Under ORS 653, most employees earn time and a half for hours over 40 in a workweek. Some industries also count by the day:

• Manufacturing: overtime after 10 hours in a day or 40 in a week, whichever pays more. Shifts are capped at 13 hours, and weeks at 55 (60 with written consent).
• Canneries, driers and packing plants: overtime after 10 hours a day or 40 a week.
• Agriculture: overtime after 48 hours a week, dropping to 40 on January 1, 2027.

A cannery worker on three 13-hour shifts logs 39 hours. A weekly-only setup pays no overtime, but Oregon owes 9 hours of it. More in overtime compliance software that flags violations before payday.

Breaks are required too: an unpaid 30-minute meal for shifts of 6 hours or more, and a paid 10-minute rest break for every 4 hours or major part of 4 hours.

Pay Frequency and Payday Rules in Oregon

ORS 652.120 requires regular paydays no more than 35 days apart. Weekly, biweekly, semimonthly and monthly payrolls all work inside that limit. Since 2026, new hires must also get a written notice of pay and deductions.

Large retail, hospitality and food service employers (500 or more employees worldwide) face predictive scheduling rules as well. Schedules go out 14 days ahead. Changes after that cost an extra hour of pay, and cut hours cost half pay per lost hour.

Final Paycheck Deadlines in Oregon

The Oregon final paycheck law (ORS 652.140) sets these deadlines:

• Employer ends the job: by the end of the next business day.
• Employee quits with 48 hours' notice: on the last day of work, unless it falls on a weekend or holiday.
• Employee quits without notice: within 5 business days or on the next payday, whichever comes first.

A late check triggers penalty wages under ORS 652.150: 8 hours of pay for each day late, up to 30 days. For a warehouse associate at $20 an hour, that's up to $4,800. The penalty is capped at the unpaid amount if the employer pays within 12 days of the employee's written notice.

Oregon Income Tax and Local Withholding

Oregon taxes wages on a progressive scale. In the 2026 withholding formula, the top rate of 9.90% starts above $125,000 for single filers and $250,000 for married filers.

Oregon payroll taxes split between what comes out of pay and what the employer covers:

• Statewide transit tax: 0.1% withheld from every employee's wages.
• TriMet and Lane transit taxes: employer-paid, at 0.8237% and 0.80% of payroll for 2026. They are never withheld.
• Metro Supportive Housing Services tax: 1% on income over $128,000 single or $205,000 joint in 2026.
• Multnomah County Preschool for All tax: 1.5% on income over $125,000 single or $200,000 joint, plus 1.5% more over $250,000 or $400,000.
• Paid Leave Oregon: 1% of wages up to $184,500, split 60% employee and 40% employer. Employers with fewer than 25 employees pay only the employee share.

For the two Portland-area taxes, withholding is required for employees earning $200,000 or more unless they opt out, and employers must offer it to everyone else. See what operators get wrong in payroll tax management.

Payroll Record Retention in Oregon

OAR 839-020-0083 requires 3 years for payroll records and 2 years for time records, each counted from the last entry. Most employers keep both for 3.

Where Oregon Payroll Goes Wrong

Under Oregon payroll laws, most errors trace back to the July rate change or to treating the state as one wage zone.

• Regional minimum wage: Every location paid one rate, or the county mapped to the wrong tier. What it costs: Back wages of up to $2.25 an hour per employee.
• July 1 change: Rates updated in January instead of July. What it costs: Short pay from the first July pay period.
• Tip credit: A tip credit taken out of habit from another state. What it costs: The full gap up to the regional minimum, every hour.
• Manufacturing overtime: Only weekly hours counted at a plant. What it costs: Unpaid overtime on every shift over 10 hours.
• Rest breaks: Paid rest breaks skipped on busy shifts. What it costs: Wage claims for the missed paid time.
• Transit taxes: TriMet or Lane tax withheld from employees. What it costs: Refunds owed to staff on every paycheck.
• Metro and Multnomah taxes: No opt-in offered, or mandatory withholding missed at $200,000. What it costs: Year-end tax bills and complaints from staff.
• Final paycheck: Termination pay held for the next payday. What it costs: Up to 30 days of penalty wages.

One payroll can span all three tiers. Here's how AI payroll automation works across multiple locations.

What Changes in Oregon in 2027

• Jan 1, 2027 (confirmed): Agricultural overtime drops to 40 hours a week. Update farm payroll before the first January pay period.
• Jan 1, 2027 (confirmed): Metro tax thresholds rise to $132,000 single and $211,000 joint.
• Jan 1, 2027 (confirmed): New state laws take effect, including HB 4089 on wage theft and HB 4013 on minors' hours.
• Not confirmed: Preschool for All rate increase. Multnomah County says the 0.8% increase starts January 1, 2027, while Portland's Revenue Division says 2028. Check with the county before changing withholding.
• Not yet published: 2027 Paid Leave Oregon rate. Employers should get it by mail by November 13, 2026.
• Not yet published: July 1, 2027 minimum wages. BOLI sets them by April 30, 2027.

Running Payroll in Oregon Without Errors

Before each payday:

• Map every work site to its wage tier, and recheck the map each July 1.
• Confirm no tip credit is applied anywhere.
• At manufacturing and packing sites, test timecards for days over 10 hours.
• Check that only the 0.1% statewide transit tax comes out of pay.
• Review Metro and Multnomah withholding for anyone near $200,000.
• Flag every termination and confirm the check went out by the end of the next business day.
• For large retail and food service sites, log schedule changes made inside 14 days and add predictability pay.
• On public works over $50,000, pay BOLI's prevailing wage from the current rate book, published each January and July.