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Legislature Passes Bill to Reduce Employee Leave ‘Stacking’

On Feb. 27, the Oregon House passed an OBI-negotiated bill that would better align a pair of overlapping leave laws, the Oregon Family Leave Act and Paid Leave Oregon. Having passed the Senate on Feb. 14, SB 1515 bill will now head to Gov. Tina Kotek, who’s expected to sign it into law.

OFLA, the older of the two programs, provides up to 12 weeks of unpaid time off annually for parental leave, sick child leave, leave for serious health conditions and for a few other conditions. The Legislature left this program in place in 2019, when it created Paid Leave Oregon, which provides up to 12 weeks of paid time off for parental and medical leave as well as “safe leave” for victims of various crimes.

Because the two programs provide leave under similar circumstances, compliance has been confusing for employers and employees. The programs’ redundancies also have led to leave “stacking,” in which employees exhaust OFLA leave, then then take paid leave for the same purpose. To avoid this sort of complication, most other states that have adopted paid leave laws repealed their unpaid leave laws. Oregon has taken longer to do so.

 

OBI worked with legislators and allied groups to reduce program redundancies during the 2023 session, leading to the passage of SB 999. However, additional work was needed to align the programs. SB 1515 accomplishes this while addressing other implementation issues. The bill’s highlights include:

  • The bill deletes most leave purposes from OFLA, ensuring that such leave is taken under Paid Leave Oregon and eliminating the possibility of leave “stacking.” OFLA will continue to cover a small number of leave types not addressed by Paid Leave Oregon. These include sick child leave, bereavement leave and leave for pregnancy disability.
  • The bill allows employees to “top off” Paid Leave Oregon benefits by using accrued paid time off to replace 100% of their wages. Because the Oregon Employment Department, which administers Paid Leave Oregon, does not share benefit amounts with employers, a mechanism to share information must be developed when rules for the law are created. Without such information, employers won’t know how much accrued PTO to use.
  • The amended bill addresses a conflict with the state’s scheduling law encountered by some employers. Affected employers are required to set schedules for employees 14 days in advance. This includes employees who fill in for colleagues on protected leave. The change ensures that employers will not be subject to penalty pay if the schedule of an employee must be changed to accommodate the return of a colleague who resumes work without giving at least 14 days’ notice.

OBI policy team members have worked extensively with legislators and other stakeholders to align the two programs since 2019. They played a central role in the development of SB 999 in 2023 and SB 1515 in 2024. OBI will continue to work with agency officials and others to ensure that the program changes initiated by SB 1515 are implemented as intended. And because alignment issues between leave laws continue to remain, OBI already has begun to work on additional changes. If you have suggestions, please contact Derek Sangston at dereksangston@oregonbusinessindustry.com.

OBI will schedule a webinar following the conclusion of the 2024 session to discuss changes to OFLA and Paid Leave Oregon. Go here to read the full text of SB 1515.

Share Your Thoughts on Oregon’s Business Climate

Is Oregon’s business climate improving, eroding or staying the same?

Do you think state lawmakers care about the success of your business?

What are the biggest challenges you face in operating your business in Oregon?

These are a few of the roughly 20 questions in OBI’s annual business survey, conducted in partnership with the Oregon State Chamber of Commerce and your local chamber. Please take a few minutes and complete it. Your responses will help us make the case for bills that would help promote a healthy private sector and against bills that would limit the ability of businesses to operate.

This survey should take just a few minutes to complete, and an individual company’s answers will remain confidential. Follow the link below to participate.

In the meantime, check out last year’s survey results here.

Legislative Updates

The Legislature has entered the final week of the 2024 session, which must end no later than March 10. Here’s where several key bills stand:

Drug Criminalization: HB 4002, which will recriminalize hard drugs in Oregon and end the failed Measure 110 experiment, passed the House with a 51-to-7 vote and the Senate with a 21-to-8 vote. The bill is massive but ultimately does four things that should give law enforcement and local governments the tools they need to combat Oregon’s drug crisis. The bill:

  • Creates a so-called “drug enforcement” misdemeanor that carries a maximum of 180 days in jail.
  • Makes it easier for law enforcement to prosecute drug dealers.
    Imposes a heightened punishment for dealing drugs in public areas like parks.
  • Establishes county-led deflection programs to provide sufficient paths to treatment rather than jail.

A companion bill, HB 5204, devotes substantial funding to Oregon’s struggling behavioral health and criminal justice systems. Oregon’s business community has endured the symptoms of Measure 110’s failed experiment through the open use and sale of drugs, retail theft and property crime, and constant threats to the safety of customers and workers. The passage of both HB 4002 and HB 5204 is the kind of bold action OBI and other members of the business community called for the Legislature to take during the 2024 session. Oregon simply could not have waited until 2025 or beyond.

Campaign Finance Reform: The -5 amendment to HB 4024 receives a hearing and vote in the House Rules Committee this morning. To go from a system that has no limits (but full disclosure and transparency) to a system that establishes limits for the first time is a lot. It’s brought together an unusual coalition of partners and will require a lot of work by the secretary of state, organizations like OBI and others. And while there are certainly components of the -5 OBI would not choose to see in a bill, the package is far better overall than the imbalanced, highly restrictive and unfair systems proposed as ballot measures. The version expected to be passed in House Rules is nearly complete, though OBI does expect one more round of amendments to tackle things like drafting errors, clarity and perhaps a few final compromises.

Tax Disclosure: OBI made solid progress this last week on efforts to clarify in state law that public disclosure of taxpayer information is prohibited at the state and local levels in Oregon. The House Revenue Committee passed HB 4031, which puts this clarification in tax statute, on a 7-0 vote. The amended bill is scheduled for a House floor vote on March 5, after which it will go to the Senate for what should be quick action.

Budget Bills: Budget work through the Joint Ways and Means Committee will pick up this week. Budget writers will rebalance some of the agency and program budgets passed in 2023 and provide funding for this session’s higher-profile policy initiatives. These include nearly $370 million for the governor’s signature affordable housing bill, SB 1537, and over $200 million, as noted above, for HB 4002. OBI also supports HB 4154, which would provide $15 million for a new semiconductor workforce talent program, part of the unfinished semiconductor support work from 2023, and HB 4042 which would fund a new loan fund for the development of commercial and industrial lands. The original ask for the latter bill was $40 million and appears to have been pared down to $10-15 million. There is also some important economic development funding related to the Hillsboro Hops’ stadium ($15 million), along with other sport facilities and youth sports programming, that OBI supports. OBI hopes to see more details in the coming days. Much of the funding for these initiatives will come from existing general fund resources, which now include over $400 million of unspent money from the last biennium.

Timber Tax: While the forest products community is working to find new money for wildfire management, SB 1593 is definitely not the solution. The bill proposes a new timber severance tax scheme. Proposed amendments to the bill were rooted in biased information and misconceptions about Oregon’s forestry and forest products industries. OBI’s testimony at the public hearing focused on the overall tax burden faced by businesses across Oregon. Our overall tax burden studies coupled with the industry-specific tax data provided by our partners at Oregon Forest Industries Council demonstrate the dramatic costs faced by businesses in the forestry and forest products sectors. Our understanding is that the hearing was a courtesy to the sponsors only and that the bill will not move.

Workers Comp. Fraud: SB 1580 would clarify Oregon law to hold employers accountable if they attempt to undermine Oregon’s workers’ compensation system by submitting fraudulent payroll forms. It passed unanimously out of the House Committee on Judiciary. It should make it through the legislative process this week with strong bipartisan support. The original proposal, which OBI opposed, would have created a Class C felony crime and carried an extremely punitive fine. The bill now clarifies that employers are subject to the same law (a Class A misdemeanor) as workers if they knowingly submit a false payroll form with the intent to reduce their workers’ compensation premiums. OBI fought for this change, as Oregon’s business community exercises overwhelming compliance and should not face the unfair burden the bill originally would have imposed.

Warehouse Workers: HB 4127 is a less onerous version of the Warehouse Worker Protection Act than early drafts of the bill. It is on track to become law after passing out of the budget subcommittee to which it was assigned. Unlike prior versions, HB 4127 borrows definitions adopted by other states and would no longer add burdensome layers to Oregon’s already strict meal and rest break laws. Importantly, the scope of industries affected by the bill has been narrowed. While OBI still believes this bill is simply not necessary, the current version will not place extreme burdens on business.

Tax Reconnect: A big concern at the beginning of this session related to a rumor that key legislators were considering a partial disconnect from the federal tax code. The alleged motivation related to federal legislation allowing immediate expensing of research and development costs and 100% bonus depreciation for short-lived assets. State lawmakers were concerned about changes to Oregon’s revenue stream if the state allowed similar treatment. Given that the federal legislation will very likely not pass before Oregon’s session adjourns, talk of this disconnect has tempered. OBI testified last week in the House Revenue Committee in support of HB 4034, which is the standard annual reconnect bill, noting how important connection to the federal tax code is both for easing administrative and compliance burdens and for supporting a competitive economic environment in Oregon.

Mandate Review: During this session’s first week, OBI offered comments in support of HB 4091 which would establish a Health Insurance Mandate Review Advisory Committee (HIMRAC). The bill calls for a balanced stakeholder group to review any proposed health insurance mandates submitted to interim legislative committees and report back. The House Committee on Behavioral Health and Health Care passed the bill on a bipartisan 10-1 vote. The bill is now in the Joint Ways and Means Committee, which is where the 2023 version of this concept died (HB 3157). Despite bipartisan support and no stated opposition, HB 4091 appears headed for the same fate. The OBI team continues to advocate for this widely supported, common-sense bill, but it remains unscheduled.

Cost Responsibility: The Joint Transportation Committee failed to move any of the bills introduced this session aimed at addressing the disproportionate burden freight users are shouldering to fund Oregon’s transportation system (HB 4165, SB 1519 and SB 1543). Although OBI and others assumed the committee would wait to address the problem in the 2025 transportation package, freight users will continue to overpay as they have for several biennia. It is estimated that the freight community will have overpaid by $500 million by 2025. Oregon’s Constitution requires that all classes of vehicles (e.g. passenger, medium-duty, heavy-duty) pay a proportionate share of road funding relative to their impact on the transportation system. OBI testified in support of fixing this problem. High freight costs increase the cost of consumer goods, disproportionately burden companies that produce commodity products (they are unable to recoup these higher costs from consumers) and diminish the competitiveness of Oregon companies since businesses from other states do not face the same disadvantage. OBI will be heavily engaged in addressing this problem in the 2025 transportation bill.

Notable News

Wash. Climate Fee: Many people are getting their most-recent NW Natural bills in the mail. Some customers have noticed a new “WA Climate Act Fee.” The Washington Legislature passed it back in 2021 as a way to encourage polluters to lower emissions. But that cost has now been passed down to the customer (KATU).

Walkout Ruling: The First Amendment doesn’t protect state senators who walked from conducting legislative work from losing their chance to run for reelection, a federal appeals court ruled Feb. 29 (Oregon Capital Chronicle).

Holvey to Retire: Longtime state Rep. Paul Holvey, D-Eugene, the second-ranking Democrat in the Oregon House, plans to retire after 20 years in the Oregon House (Oregon Capital Chronicle).

Sawmill Closures: Three sawmills have closed in Oregon within less than two months, prompting several counties’ leaders to grill state forestry officials about a plan that would limit logging in western Oregon forests (OPB).

Multnomah Homelessness: Last February, Multnomah County Chair Jessica Vega Pederson made a bold announcement: By June 2023, the county would move 300 people living in tents in and near downtown Portland off the streets into apartments. A year later, the program has only placed 37 individuals or households in apartments (The Oregonian).

Housing Expansion: Gov. Tina Kotek is hellbent on building more housing and willing to defy conservationists who have long backed her by giving cities a one-time chance to bypass the state’s land-use laws to build housing faster. But it’s unclear which cities might capitalize on the land expansion (OPB).

PacifiCorp Lawsuits: The U.S. government is threatening to sue PacifiCorp, a unit of Warren Buffett’s Berkshire Hathaway, to recover nearly $1 billion in costs related to the 2020 wildfires in southern Oregon and northern California, though the company is trying to negotiate a settlement (The Associated Press).

Buffett’s Concerns: New financial filings show the massive hit that wildfire liability is exacting on Berkshire Hathaway’s Portland-based electric utility, PacifiCorp. It’s left Warren Buffett, in his annual letter to shareholders released over the weekend, questioning future investments (Portland Business Journal).

Boardman Lawsuit: Five residents living in the Boardman area filed a class action lawsuit in federal court Feb. 27 against some of Morrow County’s largest agricultural industries, which are the main contributors to nitrates in the area’s groundwater. The defendants are Threemile Canyon Farms, Lamb Weston, Madison Ranches, Beef Northwest Feeders and the Port of Morrow (OPB).

Merger Lawsuit: Oregon joined the federal government and several other states Feb. 26 in a lawsuit that seeks to block the proposed sale of Albertsons and Safeway to the supermarket giant Kroger (The Oregonian).

DA Backs Recriminalization: On Feb. 26, Multnomah County District Attorney Mike Schmidt testified in favor of Oregon legislators’ latest proposal to recriminalize hard drugs, ending a lengthy public silence on whether he supports rolling back the heart of the 2020 ballot measure that made Oregon the first state in the country to decriminalize the possession of small amounts of heroin, meth and fentanyl (Willamette Week).

BottleDrop Closures: Officials with the tri-government Unified Command set up to tackle the burgeoning fentanyl crisis in downtown Portland announced Feb. 29 the emergency closure of two BottleDrop Redemption Centers in downtown. The temporary closure will shutter bottle machines at the Safeway on Southwest 10th Avenue and a neighboring Plaid Pantry convenience store across the street for a 30-day trial period (The Oregonian).

Universal Preschool: Multnomah County’s Preschool for All program, which aims to create 12,000 subsidized preschool slots by 2030, was by last fall struggling to meet the goals it laid out for Portland voters in 2020. That hasn’t changed. The program has still not spent a dollar of its facilities fund, the $16 million pot of money reserved for building new classrooms and expanding the capacity of existing classrooms. Meanwhile, the county must double the pace at which it creates entirely new preschool slots every year for the next six years if it wishes to reach its goal of universal preschool by 2030 (Willamette Week).

Tax-Hike Delay: In a meeting of the Multnomah County Board of Commissioners this morning, County Chair Jessica Vega Pederson said she would like to delay an embedded increase of the Preschool for All tax until 2027 (Willamette Week).

Victim Fine: The city of Madras proposed fining retailers $100 for having their shopping carts stolen from them, but grocery stores and some community members pushed back, leading the city to scrap the idea (The Bulletin).

Bend Enrollment: Bend-La Pine Schools saw a decrease of nearly 300 students in fall 2023 compared to the previous year, continuing a trend of enrollment loss that started as the pandemic struck and has left the district with an 8.4% decline in student population since the fall of 2019 (The Bulletin). Nevertheless, the district will ask voters in May to approve a five-year levy that will raise $21 million per year (The Bulletin).

Terminal Delay: The Port of Portland will delay the opening of its new, highly touted terminal at Portland International Airport after unspecified safety concerns led the port’s contractor to halt construction for a few days and review its schedule (The Oregonian).

Unemployment System: Oregon is at last retiring the ancient computer systems that manage its unemployment benefits, putting to rest a notorious bit of technology that far outlived its usefulness (The Oregonian).

OBI Accepting Visionary Award Nominations

Is there a person or organization you’d like to nominate for OBI’s highest honor, the Oregon Visionary Award? If so, please let us know.

The Oregon Visionary Award recognizes people, employers and organizations that strengthen Oregon’s economy and contribute significantly to shared prosperity by developing solutions to significant problems. Winners are honored at OBI’s annual Vision Oregon Event, which will take place this year on Oct. 23 at the Portland Art Museum.

The 2023 recipients of the Oregon Visionary Award are Families First Childcare Center and the Oregon Manufacturing Innovation Center (OMIC R&D). Go here to learn more about these organizations. Even better, watch the videos shared at the 2023 Vision Oregon Event. You can find the Families First Childcare Center video here and the OMIC R&D video here.

Please send nominations for the 2024 award to obi@oregonbusinessindustry.com, and be sure to explain how nominees have contributed to shared prosperity by developing solutions to significant problems.

Check Out OBI’s Member Benefits

OBI offers members a range of programs that can save money or help small businesses offer benefits normally available only to much larger companies. Benefit programs include:

  • HealthChoice: Helps businesses with fewer than 100 employees offer comprehensive health-care benefits through our partnership with Regence BlueCross BlueShield of Oregon.
  • CompSAFE: Helps eligible companies enjoy workers’ compensation discounts through SAIF Corporation.
  • Fuel Program: Helps members save fuel costs through our partnership with Ed Staub & Sons.
  • ODP Business Solutions: Helps OBI members save money on office furniture, supplies and other services.
  • LegalPLUS: OBI members receive 15 minutes of free legal consulting per month from Innova Legal Advisors.

Go here to learn about all of OBI’s member benefits.