OBI Launches Effort to Refer New Salem Payroll Tax to Voters
The Salem City Council on July 10 voted to adopt an employee payroll tax. The tax, which will go into effect in July 2024, was approved by a 5-4 vote despite nearly two hours of testimony overwhelmingly in opposition.
The newly adopted ordinance, which you can read here, imposes an 0.814% tax on the wages of employees, including self-employed people, for work performed within Salem city limits. It exempts work performed at the minimum wage. The ordinance requires employers to withhold the tax at each pay period and remit it quarterly. The tax will provide additional general fund resources for the city. While the resolution indicated that funds would help with rising costs associated with public safety and homeless services, the ordinance itself broadly states it will fund “community safety.”
The tax is expected to generate about $27 million annually.
The tax will place a significant new burden on workers who already pay some of the nation’s highest income taxes and have seen inflation erode their buying power, OBI’s Scott Bruun pointed out in submitted testimony. He also noted that the tax will make it harder for Salem-based businesses to attract employees and encourage them to invest and grow outside of the city. Read his comments here.
Meanwhile, tracking the tax will create a significant new administrative burden for employees and employers, especially when workers have hybrid work schedules or work on the road or at various job sites outside of the city at times.
In adopting the tax, Salem City Council echoed Portland-area governments that in recent years have layered city, county and regional taxes onto rapidly increasing statewide business taxes. This trend, according to a 2022 Ernst and Young report commissioned by OBI, has given Portland residents the nation’s second highest marginal income tax rate. It also has contributed to a regional exodus of businesses and high-earning people in that jurisdiction.
While OBI has strong concerns about the complexity, vagueness and size of this tax, it is most concerned that the decision was made without voter participation. As a result, last week OBI had a petition and signature sheets approved to move forward with sending this to the voters on the November 2023 ballot. OBI did so with the support of the Salem Chamber of Commerce. Approximately 4,000 valid signatures from registered voters in Salem are due Aug. 9. OBI’s goal is to submit 6,000 to account for possible error rates.
Grant Support Letters Needed for Interstate Bridge Project
Following passage of Oregon’s $1 billion commitment to the I-5 bridge replacement project, efforts are now focused on securing approximately $3 billion in grant funding from the U.S. Department of Transportation.
We need to show support from Oregon’s business community for federal grants to leverage the state’s funding commitment to the project. With a price tag of $6-7 billion, Oregon and Washington simply cannot afford to replace the bridge without significant federal investment.
Please email letters to Sharla Moffett (email@example.com) no later than Aug. 11.
The 2023 session has ended, but executive branch rulemaking and related enforcement work have ramped up. Significant efforts include the following:
Heat Rules: As the weather heats up heading into July, we wanted to be sure you saw the latest guidance from Oregon OSHA regarding the agency’s heat rules. A FAQ sheet can be found here. Please note the Section (2) Exemption for heat generated from work processes – like that in bakeries, warehouses, foundries and factories – is not absolute. OSHA’s new guidance notes that the rule will apply when “additional heat is introduced into the workplace outside of the hot process.” In other words, when the ambient temperature outside is above the threshold and a workplace has a hot process, the rule can apply. We are getting more info as this was not our understanding previously.
COVID Rules: OHSA is working on a permanent repeal of all COVID rules, which have been suspended temporarily by an executive order. Meanwhile, OSHA intends to adjust a few administrative rules to protect the ability of employees to wear facial coverings if they choose. Action is tentatively scheduled for August.
Paid Leave Oregon: The latest rulemaking effort involves the creation of temporary rules (“Batch 8”) that include components related to the passage of Senate Bill 999, which takes important first steps in aligning Paid Leave Oregon with the Oregon Family Leave Act. These are temporary because they need to get done before the program begins to accept applications in August and pay benefits in September. They’ll be back for permanent adoption. Paid Leave Oregon rulemaking information can be found here.
Commute Options: OBI recently hosted an informational session with businesses and business groups around the state and staff from the DEQ regarding the agency’s proposed expansion of the Employee Commute Options rule. The expansion is twofold. First, it will involve an expansion in the Portland metro area, which is subject to the rule already. Second, the effort will expand the rule’s applicability outside the Portland area, specifically to any urban growth boundary in Oregon containing at least 50,000 residents. This informational session was focused on the rule expansion outside of the Portland area. Participants strongly expressed a number of concerns about the ability of employers and local jurisdictions to comply and provide the necessary infrastructure. OBI remains heavily engaged in this effort.
Aging Oregon: Oregon is now the oldest state in the mainland United States west of the Mississippi, The Oregonian reports. At 40.3, Oregon’s median age in 2022 was 17 months higher than the nation’s and two months higher than it was in 2021. The trend is worrisome, according to state economist Josh Lehner, as an aging population produces fewer working-age people, making it difficult for businesses to thrive.
Holvey Recall: One of Oregon’s largest labor unions is on the verge of forcing a recall election for one of the state’s most labor-friendly lawmakers, the Oregon Public Broadcasting reports. United Food and Commercial Workers Local 555 has submitted petitions containing more than 6,600 signatures in favor of recalling state Rep. Paul Holvey, D-Eugene. The union is angry about Holvey’s decision not to move a bill this year that would have made it easier for workers in cannabis dispensaries to unionize. As OBI noted during the session, the bill was preempted by federal law. A recall election would take place in August.
Gas Ban: Eugene City Council on July 10 rescinded an ordinance that would have prohibited natural gas hookups in new residential construction, The Oregonian reports. The ban likely would have been preempted by federal law under a recent federal court ruling. It also faced a potential repeal by voters thanks to a successful signature-gathering effort by opponents and widespread opposition throughout the city. Milwaukee also has banned natural gas hookups in new homes as well as city-owned buildings.
Public Health Plan: A new publicly funded insurance plan is headed toward the final step it needs for state approval in spite of concerns about the impact it will have on Oregon’s health insurance marketplace for individuals and small businesses, Oregon Public Broadcasting reports. The plan is intended to cover people dropped from Medicaid when their income increases. The Oregon Health Authority estimates 100,000 will be eligible for the program.
Electricity Demand: Portland General Electric’s challenge in meeting rising electricity demand looks more formidable now than it did just a few months ago, the Portland Business Journal reports. In a new filing with state regulators, Oregon’s largest electric utility sharply raised its load forecast, citing the proliferation of data centers in the region as a key factor. As a result, PGE said it may need to add 44% more energy every year through 2028 compared to what it outlined in plans submitted at the end of March. Its need for new capacity — resources on hand to meet peak demand — could grow similarly.
Homeless Ruling: The 9th U.S. Circuit Court of Appeals, which covers Oregon and other western states, is bitterly divided over a 2022 ruling that limits the ability of cities to ban camping on public property. That 2022 decision was made by a three-judge panel, and the circuit’s judges have voted against a full-court hearing. More than a dozen of the circuit’s more conservative judges have written scathing dissents and statements, The Oregonian reports.
Housing Bill: Willamette Week takes a look at the failure of House Bill 3414 this session. The bill, a priority of Gov. Kotek, would have eased the expansion of urban growth boundaries, increasing the supply of buildable land and moderating housing prices.
Aug. 4 Webinar on PFML Program Changes
Employees will soon be able to file requests to receive benefits under Oregon’s paid family and medical leave insurance program, Paid Leave Oregon. Meanwhile, the Oregon Legislature this year made several statutory changes to bring Paid Leave Oregon into better alignment with the Oregon Family Leave Act.
In other words, there’s a lot for employers to know before Sept. 3, when Paid Leave Oregon benefits begin.
To bring employers up to speed, experts with the Oregon Employment Department will provide an overview of the program, discuss updates and answer questions on Aug. 4. The online webinar will run from 10 a.m. to 11 a.m.
The webinar is supported by OBI’s CompSAFE program, which helps qualifying businesses save on workers’ compensation insurance through a partnership with SAIF, Oregon’s not for profit provider of workers’ compensation insurance.
Go here to register.
OBI Members Can Save on Furniture, Supplies and Services with New Benefit
Whether your business wants to save on office furniture, cleaning supplies or remote working technology, OBI’s partnership with ODP Business Solutions can help.
After setting up an online account, OBI members can shop for a wide range of goods and services and even receive free next-business-day delivery on qualifying orders of $50 or more. To make the process as simple as possible, ODP provides experienced account managers and a range of payment options, including single account billing and consolidated billing for multiple locations.
Go here to learn more about this benefit and register for an account.