State Announces Minimum Wage Increases
On April 14, the Oregon Bureau of Labor and Industries (BOLI) announced the new minimum wage rates that will take effect across Oregon on July 1. Rates will go up between 4.7% and 5.6% depending on the region where an employee works
There are three minimum wage regions in Oregon. The “Portland Metro” region includes employees inside the urban growth boundary (UGB) in Clackamas, Multnomah and Washington counties. the “standard region” includes areas outside the UGB in those three counties, plus Benton, Clatsop, Columbia, Deschutes, Hood River, Lane, Lincoln, Linn, Jackson, Josephine, Marion, Polk, Tillamook and Yamhill counties. The “nonurban region” includes all other counties.
The new rates in the three regions will be:
- $15.45 per hour in the metro region (a 4.7% increase from the current $14.75 rate),
- $14.20 per hour in the standard region (a 5.2% increase over the current $13.50 rate), and
- $13.20 per hour in the nonurban region (a 5.6% increase over the current rate of $12.50).
BOLI is required to set these rates based on year-over-year increases in the consumer price index. You can read BOLI’s press release here.
Bonus Pay Legislation Clears House
The Oregon House on April 14 passed a bill that would give public- and private-sector employers badly needed flexibility to help address workforce shortages through the use of retention bonuses, which are largely disallowed under Oregon’s one-of-a-kind pay equity law. While OBI is grateful for this important step, it falls short of what employers need, which is clear authority to offer hiring bonuses. We look forward to additional work in the Senate.
HB 3205 would allow employers to offer retention bonuses without conducting complex and burdensome analyses required by the state’s 2017 pay equity law. It also would allow a specific type of bonus at the time of hire, though the mechanism is unnecessarily convoluted. Simplicity would serve employers better.
The importance of hiring bonuses is well-illustrated by TriMet, Oregon’s largest public transit agency. Desperate for drivers, TriMet raised its starting hourly wage for operators to $27 in December 2021, according to testimony offered in support of HB 3205. The wage bump failed to produce results even though TriMet also offered to train new drivers to obtain their commercial drivers’ licenses. Applications rose significantly only when the agency offered $7,500 signing bonuses, which it was able to do thanks to a legislatively approved exemption from pay equity analyses that expired in September 2022.
Employers of almost all types share similar experiences, which is why more than three dozen employers and employer groups endorsed HB 3205. As originally drafted, the bill would have allowed both hiring and retention bonuses explicitly.
As recently amended, the bill would allow employers to pay retention bonuses without conducting complicated analyses. It also would allow an employer to offer, at the time of hire, a type of retention bonus conditioned on a requirement that the employee stayed on the job for at least 30 days.
Though the amended bill is still a significant improvement over the status quo, its treatment of these 30-day bonuses is needlessly complex and would prohibit employers from marketing positions effectively to prospective employees.
Legislative and Rulemaking Updates
Employee Commuting: On April 14, the Department of Environmental Quality presented draft rules at the fifth rulemaking advisory committee meeting on the Employee Commute Options (ECO) program. Rules are being updated for the existing ECO program, which was adopted in the late 1990s in response to high ozone levels in Clackamas, Multnomah and Washington counties. Current rules require employers with more than 100 workers at a worksite to reduce drive-alone commuting by 10% below a baseline. The draft rules propose a 20% reduction in employee commuting in that region.
The rules would expand the program to include all cities statewide with a population greater than 50,000 (there are seven such cities) and require a 15% reduction in employee commuting for employers new to the program. While these numbers may not seem onerous, the program will be difficult and costly to implement, particularly for employers with a primarily in-person workforce and those not located near safe public transit options.
How does it work? Employers must survey a minimum of 75% of their workforce every two years and develop a trip reduction plan that includes such options as telecommuting, free or subsidized transit passes or vanpools, daily stipends for carpoolers, onsite or nearby childcare and eliminating paid parking. Failing to achieve a trip reduction target would not be a violation, but employers would be required to revise their plans (i.e., add more commute options) and demonstrate a good faith effort to implement them. The proposal also requires employers to identify someone whose primary professional responsibility is to implement the ECO program. OBI has engaged heavily in this rulemaking and we are extremely concerned about the direction it is taking.
Plastics Recycling: The sixth and final rules advisory committee (RAC) meeting for the first round of rulemaking for the 2021 Plastic Pollution and Recycling Modernization Act (RMA) occurred last week. The 2021 law requires a system-wide change designed to “make recycling easier for the public to use, expand access to recycling services, upgrade the facilities that sort recyclables, and create environmental benefits while reducing social and environmental harms, such as plastic pollution.” The new system will require producers and manufacturers of packaged items, paper products and food service ware to form producer responsibility organizations (PROs) to pay for most of these system changes. The RMA is very complex, and this new system will be as well. OBI’s work on these RACs is focused on supporting producers, haulers and recyclers to help address significant concerns about cost, timing and system responsibilities. We remain concerned that the monumental system changes will be very difficult to achieve in a cost-effective manner by the July 2025 implementation date. A public comment period will occur in May and June, and the second RAC will form and begin work in July.
Budget Roadshow: The Joint Committee on Ways and Means is now halfway through its four-stop roadshow, a series of meetings outside of Salem to engage with the public about the state budget. The committee conducted a public hearing at Portland Community College on April 8 and one at the Newport Performing Arts Center on April 14. A meeting at Umpqua Community College in Roseburg will take place on April 21, and the final leg of the roadshow will take place on April 28 at the Four Rivers Cultural Center in Ontario.
Warehouse Bill: HB 3568, which would broadly limit employers’ use of quotas and performance metrics in warehouse and distribution center operations, is scheduled for a public hearing in the House Committee on Rules April 18. OBI and others in the growing coalition against this bill oppose it because its provisions are overly broad, impose burdensome requirements, and are redundant. Oregon OSHA and BOLI already enforce Oregon’s strict workplace safety and rest break laws.
I-5 Bridge Funding: The Joint Committee on Transportation held an informational hearing on a proposal to fund Oregon’s $1 billion contribution to the I-5 bridge replacement project using general obligation bonds. OBI was one of a handful of stakeholders invited to testify April 13 on HB 2098, a placeholder bill that will serve as the vehicle for the funding package. Another hearing is scheduled for April 20. Sharla Moffett’s testimony focused on the need to replace the functionally obsolete and seismically vulnerable bridge to move people and freight efficiently. It also stressed the need to approve a funding mechanism this session to make the project eligible for up to $3 billion in federal funding from the Infrastructure Investment and Jobs Act. OBI’s testimony noted concern about the impact the proposal might have on Oregon’s total bonding capacity, which is usually deployed to support a wide variety of projects in many different communities.
Two Bad Bills: Two bills opposed by OBI passed by narrow votes last week. HB 2057, which would allow employees of subcontractors to sue general contractors for unpaid wages, passed the House with only 31 votes. The bill would have the unintended consequence of limiting the entry of new construction businesses in Oregon instead of helping workers get paid. Meanwhile, HB 3471, which would bar employers from asking for no re-hire agreements in workers’ compensation settlements, passed the House on a party-line vote. Both now head to the Senate, where OBI will continue to oppose them.
Roseburg Forest Products Announces $700 Million Rural Investment
OBI member Roseburg Forest Products announced on April 14 that it would invest $700 million over the next four years to upgrade and expand its manufacturing operations in Southern Oregon. As part of this historic investment, the company will build a pair of state-of-the-art plants and install upgrades at existing plants in Douglas and Coos counties.
The new facilities will be sited at Roseburg’s Dillard Complex, just south of Roseburg.
The project represents the largest known investment in manufacturing in rural Oregon. OBI congratulates the company on this extraordinary investment and thanks the entire Roseburg team for the company’s continued deep commitment to rural Oregon.
You can read more about Roseburg’s investment in their announcement here.
Legislative Tension: Legislation focusing on housing and semiconductors has largely united lawmakers during the first half of this year’s legislative session, Oregon Public Broadcasting reports, but divisive issues loom. Meanwhile, OPB reports, Republicans have employed strategies to slow the legislative process, leading majority Democrats to cancel committee meetings for most of last week to address a backlog of bills awaiting floor votes.
Amazon, Intel Renewables: OBI members Amazon and Intel have struck deals to buy significant amounts of renewable electricity. According to The Oregonian, the Umatilla Electric Cooperative, also an OBI member, will provide more renewable energy to Amazon data centers near Boardman and Hermiston. Intel will buy energy generated by a 60-megawatt power plant to be developed in Wasco County, the Portland Business Journal reports. The arrangement is made possible by a Portland General Electric program. PGE is an OBI member as well.
Workers’ Comp.: A bill that would provide workers paid time to attend medical appointments related to workplace injuries has passed the Senate, The Oregonian reports.
U.S. Chamber Survey Tracks Dramatic Rise in Public Policy Risk
Public policy risks identified by American companies have soared since 2011, according to a report released by the U.S. Chamber of Commerce this month. Common risks include changes in taxes, regulations and enforcement. Over the same period, risks attributed to other causes remained relatively stable.
To measure public policy risk, the Chamber reviewed mandatory 10-K filings submitted by S&P 500 members between 2011 and 2021. The Chamber’s survey calculates the frequency with which companies reference terms commonly associated with public policy risk such as “regulation” and “Congress.” It also measures the frequency of terms associated with non-public policy risk such as “reputation” or “economic conditions.
Mentions of terms associated with public policy risk rose 27% between 2011 and 2021 while those associated with non-public policy risk rose only 4.3%.
According to the Chamber, the most prominent drivers behind this significant jump in public policy risks are constant shifts in power in Washington, an increasingly partisan approach to lawmaking, and a growing willingness by both parties to pursue aggressive policy changes through regulation rather than congressional legislation.
Earlier this year, OBI conducted a survey of small businesses across Oregon and in a wide variety of industries and found similar sentiments. The survey’s findings include:
74% of respondents say that regulations affecting business change so frequently that it is hard to keep up with what they’re supposed to do.
41% of respondents say they’re considering closing, selling or moving their businesses because of taxes, Oregon’s regulatory environment or a combination of the two.
On a scale of one to 10, with 10 being “great,” more than 80% of survey participants rate Oregon’s business climate below a six.
Only 7% of respondents believe the state’s business climate will improve in the coming year.
CompSAFE Webinar: Heat and Smoke Rules, One Year In
Join experts from Oregon Occupational Safety and Health on Thursday, May 18 to learn how the first year under the rules went and hear about potential adjustments. The online webinar will provide a brief refresher on rule requirements, a look back at 2022 and a look ahead to 2023. State experts also will field questions from webinar participants.
The webinar is made possible by OBI’s CompSAFE program, which allows qualifying members to save on workers’ compensation insurance through OBI’s partnership with SAIF, Oregon’s not-for-profit workers’ compensation insurance provider.
The webinar will run from 10-11 a.m. and is open only to OBI members and to invited guests.
OBI members can register here.