OR HB4094

Employers who provide paid vacation time must compensate employees for all earned or accrued but unused vacation time at 100% of regular pay when employment terminates, following the same timeline as final wage payments under ORS 652.140.

"Paid vacation time" excludes sick leave, personal business leave, holidays, and floating holidays—only vacation leave benefits are covered.

Employers may still establish policies setting accrual rates, scheduling requirements, and use-it-or-lose-it deadlines, provided employees receive written notice at hire and at least 90 days before forfeiture, and have reasonable opportunity to use the time.

Vacation time that has been earned but not yet forfeited under a valid policy cannot be forfeited upon termination of employment.

Applies to vacation time earned or accrued and contracts entered, renewed, or extended on or after the effective date, which is 91 days after the 2026 legislative session adjourns.