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AUGUST 2019

 

In This Issue:

Oregon Passes Paid Family Medical Leave

By Caitlin Egeck, JD, HR and Compliance Consultant
Cascade Employers Association
[email protected]

This July, HB 2005, an Oregon bill creating a statewide insurance program for paid family medical leave, passed both the Oregon House and Senate and is awaiting the governor’s signature. HB 2005 will provide eligible employees with up to 12 weeks (with some exceptions) of partially or fully paid time away from work for family leave, medical leave or safe leave from harassment, sexual assault or stalking.

HB 2005 will apply to employers with one or more employees. Currently, Oregon allows eligible employees to take unpaid time off under the Oregon Family Leave Act (OFLA – 25 or more employees) or the federal Family Medical Leave Act (FMLA – 50 or more employees). This paid leave will run concurrently with OFLA and/or FMLA. Moreover, paid family and medical leave under HB 2005 is in addition to Oregon’s Paid Sick Leave law and any vacation or paid time off employees accrue in the course of their employment.

All eligible employers and employees will be required to make payroll contributions to the Paid Family and Medical Leave Insurance Fund. To be eligible, employees must have earned more than $1,000 in wages per year. Employers with fewer than 25 employees are exempt from the employer contributions. For employers with 25 or more employees, employees will contribute 60 percent and employers will contribute 40 percent.

The contribution rate will be determined by the Oregon Employment Department and the rate will not exceed 1 percent of an employee’s wages. The employee and employer contributions are pooled together and when an employee becomes eligible for paid leave, funds are available through the statewide insurance program.

Under HB 2005, if an eligible employee’s average weekly wage is equal to or less than 65 percent of Oregon’s average weekly wage, which is currently $1,044.40, the employee will receive 100 percent wage replacement during their leave. Employees who earn more than 65 percent of Oregon’s average weekly wage will receive wage replacements based on a tiered system.

The rules for HB 2005 will be established by September 1, 2021, with contribution collections starting on January 1, 2022 and benefits beginning on January 1, 2023.

Cascade will keep you updated on HB 2005. If you have any questions, let us know!

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Oregon Passes Changes to Equal Pay Act

By Jenna Reed, VP of HR Services and General Counsel
Cascade Employers Association
[email protected]

This July, Oregon’s Governor signed SB 123 which amends portions of Oregon’s Equal Pay Act. The changes are not what many employers had hoped for, but they do provide some important clarifications.

Oregon’s Equal Pay Act prohibits pay discrimination on the basis of race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age against employees for performing work that requires substantially similar knowledge, skill, effort, responsibility and working conditions, unless the difference is justified by one or more of the factors identified in the Act. The Act also prohibits employers from asking about an applicant’s current or past salary history prior to an offer of employment.

Most Notable Changes:

Removing language that required an Equal Pay Analysis to be related to the protected class asserted by the Plaintiff. By removing that language, employers can conduct a valid Equal Pay Analysis under this law without the specific protected class information of its employees and still be able to take advantage of the opportunity to avoid compensatory and punitive damages. It also clarifies that the analysis be reasonable in detail and in scope in light of the size of the employer; includes a review of practices designed to eliminate unlawful wage differentials; and shows the employer has made reasonable and substantial progress toward eliminating unlawful wage differentials for their employees.
Clarification that it does not violate the law to pay a different level of compensation to an employee who: pursuant to a claim for a compensable injury receives wages for modified work; or as a result of a medical condition, is temporarily performing modified work.

If you have any questions about Oregon’s Equal Pay Act, we’re here to help!

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Five Things You May Not Know About Herb Pharm –
Featured Member

By Gayle Gilham, President
Cascade Employers Association
[email protected]

Herb Pharm logo

With a mission to create the highest quality herbal extracts available, this southern Oregon company is committed to educating people on how to practice safe, effective herbalism. Did you know....

  1. In the 1970s, founders Ed Smith and Sara Katz searched store shelves for extracts made with high quality ingredients and a thoughtful process. They wanted purity and simplicity; herbs that were good for them and the world around them. They didn’t find what they were looking for, as the herbs and capsules they did find were pallid, aroma-less and seemingly stripped of their natural bounty. What they did discover was literature on how to create their own extracts through old, used books like the United States Pharmacopeia and the National Formulary. These books (some dating back to the 1850s) introduced them to ways of preparing herbs that they’d never heard of.

  2. Herb Pharm officially came to life in 1979 when Ed and Sara moved to a wooded community of herb-enthusiasts in southern Oregon’s Josephine County. By 1982, they were successfully extracting herbs they’d grown and harvested in a lab attached to their home. As their products became more and more popular, they turned their home into a hub for the maturing company, building an addition that housed the lab and using their dining room as the shipping department. Sara used their typewriter to create labels for each bottle.

  3. In the mid-1980s, Herb Pharm was in a position to hire a few employees, and in keeping with the company’s mission, they offered their new hires benefits as soon as possible. In the mid-1990s, the company built a large facility dedicated to extracting herbs and to accommodate the increasing demand for their herbal products, and now employs nearly 150 people.

  4. In time, Ed and Sara’s home and lab became a classroom where the couple could pass their knowledge down to future herbalists. This training and educational system would eventually become the Herbaculture Internship Program. To this day, the program is a powerful, residential, hands-on experience in herbalism. Many intern graduates have gone on to become herbalists in their own right.

  5. As the company grew, so did their responsibility. Ed and Sara became the leading, founding members of United Plant Savers, or UpS, a group dedicated to preserving the native herb population in the US. The organization changed the way the herb world thought about cultivation and wildcrafting.

Cascade is proud to feature this employer, committed to learning and teaching others how to ethically create high quality extracts the Herb Pharm way – a way that cares for every plant, animal and person in every ecosystem we touch..

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Hot Compliance Question

By Caitlin Egeck, JD, HR and Compliance Consultant
Cascade Employers Association
[email protected]

Question: I want to offer an employee a Separation Agreement upon termination. What are my options? Is there a waiting period required before the employee can sign?

Answer: Separation Agreements are usually offered in high risk situations where an employer is seeking to protect the company from certain actions an employee may take following their termination. Commonly, Separation Agreements are offered with some form of “consideration,” such as a severance amount given to the employee in return for the employee’s release of claims against the employer.

Signing the Separation Agreement must always be voluntary. While Separation Agreements are often tied to a release of claims, it is important to note that employers cannot release an employee’s right to file a charge or complaint with the EEOC, BOLI, the NLRB, or any other federal, state, or local administrative body or government agency.

Separation Agreements do have different requirements depending on the age of the employee, or whether the agreement is given for a layoff situation. Employees 40 years and over in age must be given 21 days to consider the agreement, though the employee may choose to sign the agreement before the 21 days are up. This extends to 45 days in a layoff situation if more than one employee is affected. Additionally, employees age 40 and over must be given seven days to rescind the agreement once they have signed it.

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HR Stats You Should Know

By McKenna Arnold, Survey Manager
Cascade Employers Association
[email protected]

250. That’s the number of jobs represented in Cascade’s Nonprofit Pay and Benefits Survey that was recently published. This survey provides in-depth market pay and benefit data stemming from nonprofit organizations throughout Oregon and Southwest Washington. Data for this survey was collected between March and May of 2019, with 171 nonprofit organizations participating throughout Oregon and SW Washington.

Here are a few interesting findings:

  1. Top Reported Jobs

    Executive Director
    Finance Director
    Program Manager
  2. Geographic Location and Total Employment Count Shift Participant Distribution

    The number of organizations from the Mid-Willamette area has remained steady at 47% in 2019, however we see a shift away from Portland Metro to the Surrounding Area. Portland Metro’s participation rate has dropped in 2019 from 41% to 35%, while the Surrounding Area rose from 12% to 18%. This shows a greater participation rate from Southern and Eastern Oregon, which begins to even out the geographic cuts from the overwhelming domination of Portland Metro and Mid-Willamette in the 2017 report.
  3. Decline in group health insurance

    In 2017, 92% of employers offered group health insurance; however, that percentage has dropped to 88% in 2019. While a large majority still provide group health insurance, it is interesting to see this trending downward, and makes it a benefit to watch in the coming years.
  4. Changes in Employer Contribution to health insurance options.

    2019 has seen Employer Contribution to Traditional/Indemnity/Fee for Service Plans rise to 99%, up from 93% in 2018. We have also seen a rise in the number of organizations that offer Health Maintenance (HMO) insurance options from 24% in 2017 to 31% in 2019. However, the Employer Contribution to HMO plans has decreased through the years, from 93% in 2017, 88% in 2018, to 83% in 2019.

If you’re in need of pay and benefit information for your nonprofit organization, the survey is now available for purchase.

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EEO-1 – Component 2 Pay Data Portal Now Open

By Jenna Reed, Vice President, HR Services and General Counsel
Cascade Employers Association
[email protected]

As we discussed last month, employers that have 100 or more employees and most federal contractors with 50 or more employees are now required to submit pay data in addition to race, ethnicity and sex data through an EEO-1 Report annually. Component 2 of the EEO-1 (pay data) must be submitted no later than September 30, 2019 and generally must include pay information for both 2017 and 2018. This July, the EEOC opened up the portal for employers.

Do you have to submit this information?

Employers, including federal contractors, are required to submit Component 2 compensation data for 2017 if they have 100 or more employees during the 2017 workforce snapshot period. The “workforce snapshot period” is an employer-selected pay period between October 1 and December 31 of the reporting year.

Employers, including federal contractors, are required to submit Component 2 compensation data for 2018 if they have 100 or more employees during the 2018 workforce snapshot period.

Federal contractors with 50-99 employees are not required to report Component 2 compensation data.

Federal contractors with 1-49 employees, and other private employers with 1-99 employees, are not required to file either EEO-1 Component 1 data or Component 2 data.

How is this information reported?

Once the workforce snapshot date is determined, employers will need to categorize all employees in that period into one of 10 EEO categories. Then, the employer must arrange employees within each EEO category into one of 12 compensation bands. Once that is done, employers must submit the information based on the sex and race or ethnicity of employees.

It’s also important to note that Box 1 information from the IRS Form W-2 is what is required to be submitted. Employers may not use gross annual earnings. Employers are also required to report the number of hours worked for each employee. For non-exempt employees, only actual hours worked must be reported. Employers are allowed to report 40 hours for full-time exempt employees and 20 hours for part-time exempt employees.

Employers that are required to submit data should have received a letter in the mail and an email notification which includes a User ID needed to access the system.

Cascade will continue to monitor and update you on EEO-1 Pay Data news. If you have any questions, please let us know!

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Retirement Plan Legislation Update

Guest article by Matisse Capital
www.matissecap.com

New legislation and regulations are currently moving through Congress that could have effects on retirement plans soon if passed this year. Members of both the House and Senate have put forward legislation to help address current issues surrounding retirement savings in America.

The House bill known as the Setting Every Community Up for Retirement Enhancement (SECURE) Act, recently passed the House by a large margin of 417-3 on May 23rd. The bill now sits with the Senate where the Senate Finance Committee is focused on passing the Act via unanimous consent (Senate would vote on House version without making changes) to send it to the President for signature.

The timing on this vote remains uncertain due to opposition from certain Senators. The original hope was to pass it before the August recess, as lawmakers’ attention will turn to the 2020 Presidential election cycle soon after. An alternative option that SECURE Act advocates are pushing for is to add the Act to the must-pass budget/debt legislation that Congress and the Trump Administration are working on.

Summary of Key Provisions in the SECURE Act

  • Multiple Employer Plans (MEPs). Unrelated plan sponsors could come together in pooled employer plans.
  • Part-Time Workers. Requirement for employers to cover employees that complete at least 500 hours of service annually for three consecutive years.
  • Lifetime Income Products and Disclosure. Create new fiduciary safe harbor for the selection of lifetime income providers and address portability concerns. Also require benefit statements to disclose the monthly income stream the participant would receive based on their total balance.
  • Auto Enrollment Cap. Increase cap to 15% from 10%.
  • Safe Harbor Plans. Eliminate notice requirement for nonelective contributions and extend deadline for becoming a nonelective safe harbor plan until the last day of the following plan year if a 4% nonelective contribution is made.
  • RMDs. Increase required minimum distribution age to 72.
  • IRA Age Limit. Remove limit for traditional contributions.

While the SECURE Act addresses some key concerns about retirement savings, there is a feeling in the industry that it is not enough. One of the biggest challenges today is that not enough Americans are saving for retirement, which this Act does attempt to address with the provision to allow unrelated plan sponsors to create MEPs. However, other concerns not addressed include the depletion of the Social Security trust fund, and high health care costs.

We will continue to monitor the progress of this bill and provide updates, including details of the final regulations and what plan sponsors need to do to comply.Matisse Logo

Matisse Capital is Cascade Employers Association's retirement plan management partner.

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You Also Might Be Interested In These Recent Great Work! Posts

By Cascade Staff
Cascade Employers Association
cascadeemployers.com

Are Your Pay Practices Market Competitive? If this is something you’ve been asking yourself, you’ll want to read this article and find about some available resources.

Why Diversity and Inclusion? You don’t have to read this blog post to know that diversity and inclusion is becoming more and more of a focus in the business community and an increasingly common topic on many executive agendas, in board meetings and employee performance and accountability documents. But why should organizations be focusing on this now?

Of course, feel free to subscribe to get more great articles like these.

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