The Oregon House on April 14 passed a bill that would give public- and private-sector employers badly needed flexibility to address workforce shortages. OBI is grateful for this important step. To serve employers and employees more effectively, however, we urge the Senate to refine the bill, giving businesses clear authority to offer hiring bonuses.
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 de-facto hiring bonuses, though the mechanism is unnecessarily convoluted. Simplicity would serve employers better.
The importance of hiring bonuses may be illustrated best by TriMet, Oregon’s largest public transit agency. Desperate for new drivers, TriMet raised its starting 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 could share similar experiences, which is why more than three dozen employers and employer groups endorsed HB 3205, which as originally drafted would have allowed hiring and retention bonuses explicitly.
As recently amended, the bill would allow employers to pay retention bonuses without conducting equity analyses. It also would allow hiring bonuses in a roundabout fashion. Employers would be able to offer retention bonuses conditioned on a requirement that employees stay on the job for at least 30 days.
Though the amended bill is still a significant improvement over the status quo, its treatment of de-facto hiring bonuses is needlessly complex and would prohibit employers from marketing positions effectively to prospective employees.
OBI urges the Senate to improve HB 3205 and work with the House to put it on the governor’s desk.