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JULY 2017

 

In This Issue:

Oregon Minimum Wage Increased on July 1

By Ryan Orr, JD, HR and Compliance Consultant
Cascade Employers Association
rorr@cascadeemployers.com

Just a quick reminder that Oregon’s minimum wage increased on July 1.

The new rates are as follows:

  • Non-urban counties (Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa, and Wheeler) – $10.00 p/hour
  • Portland Metro Area (visit this link to see if you are located within the Metro area) – $11.25 p/hour
  • Everywhere else – $10.25 p/hour

For workers that do not spend half or more of their time in a specific area, or delivery drivers who do not start and end at the same location, employers need to track the time spent in each area and pay at least the minimum wage for time spent in those areas. The alternate option is to pay the highest rate of pay, which is obviously more costly but relieves the employer of the burden of tracking time in each area.

For additional wage and hour questions, give us a call.

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Legislative Update

By Ryan Orr, JD, HR and Compliance Consultant
Cascade Employers Association
rorr@cascadeemployers.com

With the end of the legislative session rapidly approaching (July 10), we thought it would be good to check back in on the employment bills we’ve been tracking to see where they’re at.

Here is a summary of the current status of these bills, along with notes about any changes (in italics) we’ve seen with the bill’s status or with the text of the bill.

SB 279 –

This bill would change the final paycheck law. In that law, if an employee gives the employer notice of nonpayment of final wages, the employer can limit the penalty wage to 100% of the unpaid wages if the employer pays the employee within 12 days of receiving the notice. This bill would require the employee’s notice to explicitly inform the employer about the 12-day deadline that could cap the employer’s penalty.

Status: This bill has passed the Senate and is under consideration in the House. The bill has been referred to the house rules committee without recommendation as to passage.

SB 299 –

This bill would make several amendments to the Oregon Sick Leave (OSL) law. Most of the changes are minor language clarifications that bring the language of the statute in line with how it has been interpreted by BOLI and others. Most notably, the bill would clarify that an employer with a more generous sick leave or PTO policy would need to comply with the sick leave rules for only the first 40 hours provided. This is different than how BOLI is interpreting the law, which is that an employer with a more generous PTO policy must protect the first 40 hours used for sick leave purposes.

The amendments to the bill would also exempt owners, those with a substantial ownership interest, and parents, spouses, and children of owners from the definition of employee, both for determining whether an employer must offer paid or unpaid sick leave and in terms of providing sick leave to these exempted individuals. Finally, the amendments clarify that commission and piece-rate employees need to be paid for sick leave at minimum wage or greater, rather than determining the employee’s regular rate of pay based on compensation and hours worked. For employees who are paid a base rate as well as a commission or piece-rate, the employer needs to pay the greater of the employee’s regular rate of pay or minimum wage.

Status: This bill has passed the Senate, passed the House with revisions, and the revised bill passed again in the Senate. The bill has been signed into law by the governor, with portions of the bill taking effect immediately and other portions taking effect with regards to sick leave accrued on or after January 1, 2018. We will be publishing an alert that provides more detail on the final changes and when each takes effect.

SB 828 –

This is the so-called Predictive Scheduling bill. It requires large employers in certain industries (retail, hospitality, food service) to provide a good-faith estimate of the amount of hours an employee will typically be expected to work and advanced notice of employees’ actual work schedules. It also provides for certain amounts of rest between shifts. Employers who do not provide adequate rest between shifts or change an employee’s schedule or call an employee in without advanced notice may be subject to certain penalty wages.

The Senate amendments to the bill have changed the definition of large employer to those with 100 or more employees to those with 500 or more employees. It also creates the concept of a voluntary standby list that employees may agree to participate in to receive additional hours. It also provides employees with a right to provide input on their work schedules and makes it unlawful for an employer to retaliate based on the input provided. However, an employer does not need to make a schedule that coincides with the employee’s input.

Status: This bill has passed the Senate and the House. The bill is awaiting the Governor’s signature.

SB 984 –

This bill clarifies the manufacturing daily overtime rule so that it requires employers to pay only the greater of daily or weekly overtime in a workweek. Currently, BOLI has taken the position that as of January 1, 2017, all employers subject to this rule must be paying a combined total of daily and weekly overtime each week.

Status: This bill has passed the Senate. The bill is now under consideration in the House and has been referred to the House rules committee.

SB 1040 –

This bill would allow employers and labor unions to require membership in a labor union as a condition of employment.

Status: This bill has passed the Senate and the House and was signed into law by the Governor on June 14, 2017. The law took effect immediately upon signing.

HB 2005 –

This bill is the so-called Oregon Equal Pay Act. While discrimination in compensation on the basis of protected classes is already illegal at both the state and federal level, this bill creates some more specific requirements.

For instance, the bill prohibits paying coworkers differently for the same job unless the employer can provide that the pay disparity is based on merit, seniority, production, education, training, experience, workplace location, or travel. Additionally, employers cannot ask applicants about their current pay, cannot base the pay of a new hire on current or past compensation, and cannot ask about salary history until after a job offer is made. Finally, employers who conduct audits of their pay equity practices at least every 3 years can avoid pain and suffering and punitive damages if an employee successfully brings a claim of pay discrimination.

For more detail, read our alert on this bill.

Status: This bill was signed by the Governor and while portions of it will take effect this September, most of it will take effect between 2019 and 2024.

HB 2567 –

This bill is essentially a state version of the federal WARN act, which requires certain employers (100 or more employees) to give employees at least 60 days advanced notice of plant closures or mass layoffs in most circumstances.

Status: Bill has passed the House and is under consideration in the Senate. The bill has been referred to the Senate’s workforce committee.

HB 3008 –

This bill makes it unlawful for an employer to require an employee to make any false statement or record regarding hours worked or compensation received.

Status: Bill has passed the House and the Senate. The bill was signed into law by the Governor on June 6, 2017 and will go into effect on January 1, 2018.

HB 3087 –

This bill would create a family medical leave insurance program that would provide paid family leave benefits for employees. The program would be funded by an equally split contribution between the employer and employee that may not exceed .5% of the employee’s wages.

Status: Bill has been introduced into the House.

On the federal front, the Senate released its proposed healthcare bill last week, dubbed the Better Care Reconciliation Act (BCRA). While the bill, as written, would make sweeping changes to the Affordable Care Act (ACA), the bill may have difficulty making it out of the Senate. If it does pass the Senate, it would also need to pass the House, which also seems like a dim prospect in its current form. All said, this is still a situation to simply monitor, as we wait and see how the political wrangling of Washington plays out.

Of course, we will continue to monitor any new developments at both the state and federal level to determine if there are any changes that will affect employer practices. For any questions about your compliance obligations, give us a call.

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OregonSaves Launches in July, Bringing New Requirements to Employers

By Curtis Farmer, Director, Group Benefit Programs
Cascade Employers Association
cfarmer@cascadeemployers.com

Beginning in July, employers in Oregon will have a new option for providing a retirement solution to their employees, but it brings with it a mandate for all employers to provide a qualified savings option for their employees that will be enforced in phases over the next several years. OregonSaves, a new state-sponsored retirement plan, launched on July 1st and, according to the State Treasurer’s office, it could assist up to 1 million Oregon employees in their efforts to save for their future.

At the time of its launch, 40 Oregon employers will be participating in the pilot program with others to join in the fall.

How it Works

When an employer enrolls in OregonSaves, all of its employees are automatically enrolled in the plan and they start automatic contributions of 5% of their paycheck into a Roth IRA, with an automatic increase enforced annually until the employee is contributing 10% of eligible pay. The employee does, however, have the right to opt out of the program at any time or change the contribution amount to a percentage of their choosing.

The first $1,000 that the employee saves is invested in a low-risk “Capital Preservation Fund,” while the remainder of funds beyond the first $1,000 of savings is invested in a target date fund that is based on the employee’s age.

Employer contributions are not required, however the employer is required to remit the employee’s contributions through payroll deduction and keep contribution records for 3 years. Contributions are submitted through an online employer portal on the OregonSaves website. New employees will need to be enrolled within 60 days of their date of hire.

The Mandate

As indicated earlier, this new program also brings with it a mandate. All employers will eventually have to participate in the program or file a Certificate of Exemption. This certificate is for employers that are already providing a qualified retirement plan for their employees and are therefore exempt from participating in the OregonSaves program. The certificate will need to be revalidated every 3 years and the deadline for Oregon employers to comply is based on each organization’s number of employees.

If an employer has more than 100 employees, they must comply with the mandate this year, starting November 15, 2017. Employers with 50 to 99 employees have until May 15, 2018, while those with 20 to 49 employees have until December 15, 2018. Smaller organizations have even longer to comply, as those with 10 to 19 employees have until May 15, 2019, those with 5 to 9 employees have until November 15, 2019, and those with 4 or fewer employees have until May 15, 2020 to comply.

It’s also important to note that President Trump signed House Joint Resolution 66 in May that blocked the Department of Labor’s ruling that states could sponsor savings programs that were exempt from federal ERISA requirements. As this does not prevent automatic savings programs, the Treasurer announced last month that the launch of OregonSaves would move forward as planned. More information on the program can be found at www.oregonsaves.com.

In Case You Didn’t Know

Cascade Employers Association offers a top-notch 401(k) solution – easier than going out into the marketplace or developing your own strategy without assistance. If you are subject to the new mandate, be sure to check with us on an alternate option.

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Hot Compliance Question

By Ryan Orr, JD, HR and Compliance Consultant
Cascade Employers Association
rorr@cascadeemployers.com

Question: To have fewer problems with attendance, can we advertise all open positions with the requirement of a driver’s license and owning a car?

Answer: You most likely cannot advertise that for all your positions. In order to require applicants to have a driver’s license and a car, driving one’s own car must be a bona fide requirement of the job. Adherence to an attendance policy does not require an employee to necessarily have a license or own their own car.

Employees may get to work in any number of ways and still be compliant with the company’s attendance policy. Requiring a driver’s license and ownership of a car, without a bona fide job requirement, may unintentionally have an adverse impact on certain groups of people, resulting in disparate impact against a protected class. For example, requiring a driver’s license may exclude qualified people with disabilities who would otherwise be able to perform the job and meet the attendance requirements of the position.

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Tips for HR Ninjas: Overtime Rules? The DOL Wants to Hear From You ... Again

By Bethany Wright, HR Consultant
Cascade Employers Association
bwright@cascadeemployers.com

Have you been wondering what happened to the new overtime rules that were supposed to take effect last December? Well, not much. The injunction preventing the rules from taking effect is still in place.

However, after multiple delays there has been small movement. Last week, the Department of Labor submitted a request for information to the Office of Management and Budget, which when published, will allow the public another opportunity to comment on the overtime rules. This probably doesn’t signal much, but it shows there is still some life left in this.

There were over 270,000 public comments last time, so if you’re an HR Ninja wanting to say your piece, your opportunity will be coming soon.

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Department of Labor Withdraws Joint Employer and Independent Contractor Guidance

By Ryan Orr, JD, HR and Compliance Consultant
Cascade Employers Association
rorr@cascadeemployers.com

On June 7, 2017, the Department of Labor announced that it is withdrawing its previously issued guidance on independent contractor and joint employer status.

While the withdrawal of the guidance likely signals a change in enforcement priorities for the DOL, the agency’s press release was clear to note that the withdrawal of the guidance does not change the existing rules and case law on which the guidance was based. In other words, organizations should continue to scrutinize their independent contractor classifications, as well as any other organizations with which there could be potential joint employer situations.

For additional information on this subject, please see our prior article on the independent contractor guidance and the DOL’s joint employer fact sheet.

For questions about how independent contractor classification or joint employer liability can affect your organization, give us a call.

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Consumer Price Index (CPI)

Consumer Price Indexes listed were issued June 14, 2017 for May data. 1982-84 = 100, unless otherwise noted.

  CPI-W
United
States
2016

234.436
2017

238.609
Change

1.8%
Portland/
Salem

Avg. 2nd 
half/year
2015

236.882
2016

242.014


2.2%
  CPI-U
United
States
2016

240.229
2017

244.733
Change

1.9%
Portland/
Salem

Avg. 2nd
half/year
2015

245.405
2016

251.710


2.6%

Note: The Consumer Price Index (CPI) program produces monthly data on changes in the prices paid by urban consumers for a representative basket of certain retail goods and services. CPI-W consists of urban households whose primary source of income is derived from the employment of wage earners and clerical workers. CPI-U includes wage earners and clerical workers, salaried workers, the self-employed, retirees, and the unemployed.

US Department of Labor Historical CPI Data

 


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