SB 906 was signed into law in Oregon by Governor Tina Kotek on May 28, 2025, and it becomes effective on January 1, 2026. In short, the law requires that employers provide new employees with a written explanation of how their earnings and deductions are reflected on itemized wage statements (i.e. pay stubs). Oregon’s Bureau of Labor and Industries (BOLI) has created a template, available in both English and Spanish, to help employers meet this new requirement.
Key requirements include explaining to employees:
- How often they’ll get paid (your pay period)
- What pay rates may apply (hourly, overtime, bonus, etc.)
- What benefit deductions or contributions might show up
- The purpose of each deduction (like insurance premiums or 401(k) contributions)
- Any allowances you claim toward minimum wage
- Any employer-provided benefits that appear on their pay stub
- A key or glossary explaining your payroll codes (like “OT1 = Overtime,” “MED = Medical Deduction”)
Employers can provide this information in a physical document or electronically (like a PDF, link, or onboarding portal). You don’t have to make a unique version for every employee. A clear, general explanation of your company’s pay and deductions is fine.
Did you know? A Human Capital Management system like People Savvy HCM makes it easy to automatically notify employees of important information like SB906. Pop-up alerts, email notifications, self-service dashboard links, and many more methods can be quickly and easily set up. Set it, forget it, and take comfort in the knowledge that you’re compliant.
Why It Matters
This law isn’t just about compliance — it’s about building trust and avoiding confusion.
Employees often have questions about what’s being deducted or what certain pay codes mean. SB 906 helps ensure they have that information up front, reducing confusion and payroll questions later. It also provides a reference point that HR and Payroll administrators can point back to when employees ask questions later.
Failing to comply could lead to penalties of up to $500 per violation from BOLI, so it’s worth getting right before 2026.
How to Prepare Now
Here’s how to get your business ready before the January 2026 deadline and to stay compliant:
- Review your pay stubs – Verify that all pay rates, deductions, and benefit contributions are correct and clearly labeled.
- Create a written “Pay Stub Explanation” document – Use the BOLI template or your own document. Make sure to include pay period, pay rates, deduction types, and code glossary
- Decide how you’ll deliver it – Possible methods include your onboarding packet, employee self-service portal, email, or printed form.
- Train your HR or payroll staff – Make sure everyone knows when and how to give out the explanation and can answer questions about the requirement.
- Document it – Keep a record showing that new employees received the explanation.
- Update as needed – Review annually or whenever pay codes or deductions change and make necessary changes.
SB 906 is essentially about pay transparency. It’s about making sure employees understand how they get paid, what deductions come off, what each code means. The key is to view this not as a burdensome, extra task, but as an opportunity to strengthen payroll clarity, employee trust, internal controls, and informational efficiency.
If you’re thinking about how to accomplish all of this with a printer and copier, it may be time to evaluate better options. Chances are, this won’t be the last regulatory change that impacts HR and Payroll. Let us help! At Bennett/Porter, we can show you easier, more efficient ways to inform and manage your workforce. Get in touch today.
