When you plan to separate from Oregon employees, understanding the Oregon employee separation process is the key to mitigating risk to your organization. Since employee termination laws can vary significantly on the local and state level, your employer obligations will also differ in discrete locations.
This employee separation checklist and guide is an overview of Oregon’s final paycheck requirements, separation notices, severance agreements, reporting employee termination, and withdrawing registration to do business in the state.
Oregon Employee Separation Checklist
- Provide final paycheck
- Issue separation notice
- Execute severance agreement
- Report termination
- Withdraw registration to do business
1. Final Paycheck Requirements in Oregon
Under Oregon state law, employees who separate from their employer must be paid according to specific timelines. Terminated employees must receive their final paycheck by the end of the next business day. Those who resign with at least 48 business hours’ notice are entitled to immediate payment. Employees who resign without notice must be paid within five days or by the next scheduled payday, whichever comes first.
All earned and unpaid wages must be included in the final paycheck, but employers are only required to pay out unused vacation time if stipulated by an employee contract or company policy. Final paychecks can be delivered through regular channels, or mailed upon request.
Employers who fail to pay wages on time may face penalties, including payment of the unpaid wages, and up to an additional 30 days’ wages at the employee’s regular rate.
2. Firing Employees in Oregon
Firing employees in Oregon is relatively straightforward, since Oregon is an at-will employment state. However, employers should note that the state has specific requirements regarding non-compete agreements.
Employers who have executed non-compete agreements with any departing employees must provide a signed and written copy of the terms of the agreement, within 30 days of termination.
3. Severance Agreements in Oregon
If you plan to execute a severance agreement with employees, you must specifically list the claims being released under both federal and state law.
State law claims that can be released include those under the Oregon Equality Act, Oregon Workplace Religious Freedom Act, Oregon Workplace Fairness Act, Oregon Equal Pay Act, Oregon Pregnancy Accommodation Law, Oregon Identity Theft Protection Act, Oregon Family Leave Act and Oregon’s other leave laws, Oregon’s predictive scheduling laws, and Oregon’s minimum wage and overtime laws. Furthermore, any claims release should only waive those that arose before the agreement’s effective date, not those that may arise afterward.
Note that non-disparagement clauses in Oregon cannot restrict employees from discussing workplace conduct if it involves several key topics: discrimination, sexual harassment or assault, discrimination against armed forces members, or discrimination based on disability.
Oregon also has its own WARN Act. Employers subject to the federal WARN Act must provide additional notification to the Department of Community Colleges and Workforce Development, when carrying out a mass layoff.
Employers must also remember to review applicable federal employee termination laws and guidelines. For example, the NLRB’s 2023 McLaren decision restricts the use of non-disparagement and confidentiality provisions in severance agreements.
4. Reporting Employee Termination in Oregon
When separating from an employee with an Income Withholding for Support Order (“IWO”), report the employee’s termination to the child support agency, court, or attorney that issued the IWO as soon as possible. To expedite this, your organization may register for online reporting with the Federal Office of Child Support Enforcement here.
You may also opt to report an employee’s termination by completing the Notification of Employment Termination or Income Status section of the IWO. Then fax or mail it to the child support agency that issued it. You will need the following information:
- Employee Name
- Employee Case Identifier
- Last Known Home Address
- New Employer Address (if known)
- Date of Employee Separation
5. Withdraw Registration to do Business in Oregon
If separating from your last Oregon employee ends your business operations in the state, your organization may wish to withdraw its registration to do business in the state. Which forms you’ll need to submit to the Oregon Secretary of State depends on which kind of legal structure is involved. For-Profit Corporations must file this Application for Withdrawal, while Non-Profit Corporations should file this Application for Withdrawal. Lastly, Limited Liability Companies (LLCs) need to file this Application for Withdrawal.
Stay Compliant with Oregon Employee Separation Requirements
Understanding employee rights and the requirements for an Oregon Employee Separation Agreement helps employers ensure legal compliance.
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