NFIB/Oregon thanks the Salem Business Journal for giving small business regular monthly space to deliver the message from Main Street
What county were you in and what time were you there? Your employer needs to know.
Back in February, the Oregon Legislature passed Senate Bill 1532, a new minimum-wage law establishing an updated schedule for future increases in the rate that employers must now pay. The first of these increases took effect on July 1, 2016.
Since voters passed Ballot Measure 25 in 2002, the minimum wage had been adjusted annually based on increases in the federal Consumer Price Index (CPI). Over the next 14 years, Oregon’s minimum wage increased from $6.50 to $9.25—a full $2-per-hour higher than the current federal minimum wage of $7.25.
Then along came SB 1532.
So, how much do Oregon employers have to pay now? The answer is complicated, because SB 1532 did much more than merely increase the minimum wage. It also established three regions within the state, all with scheduled increases to occur at the same time, but by varying amounts.
The idea behind the three different rates is that it’s more expensive to live in some parts of the state than others and that workers should earn an hourly rate of pay that takes that into account.
The Standard Region consists of Oregon counties that are located on the central and north coast, the Willamette Valley, and also the counties of Hood River, Wasco, Deschutes, Jackson, and Josephine.
The Nonurban Region comprises all the remaining counties, mostly located on the south coast and in central and eastern Oregon.
A third, Portland Metro Region, is defined by areas located in the counties of Washington, Multnomah and Clackamas that fall within the Portland Urban Growth Boundary (UGB), most easily described as the urban parts of the three counties (the rural parts remain in the Standard Region under SB 1532).
Starting on July 1, the minimum wage for the Standard Region and the Portland Metro Region increased to $9.75. The Nonurban Region increased to $9.50.
By July 2022, when the bill’s schedule of increases is fully implemented, the differences in the regions will become a bit more spread out. The Nonurban Region rate will be $12.50 an hour, the Standard Region’s $13.50, and the Portland Metro Region’s $14.75.
After 2022, Oregon returns to calculating its minimum-wage rate based on the CPI.
Simple enough, you can be forgiven for thinking, all a business owner has to do is look at the map to calculate the correct minimum-wage rate. But wait.
To complicate things further, the Oregon Bureau of Labor and Industries (BOLI) recently adopted the final rules for determining employer location, specifically addressing the issue of how employees should be paid if part of their work week is spent in a higher-tier region.
For example, if an employee spends less than 50 percent of his or her time at the employer’s location, and the employee works in more than one region in a pay period, the employer now has to pay the employee the regional rate for each hour worked in each respective region. (Delivery drivers are excluded, so long as they start and end their day at the employer’s location.)
Now add to this higher cost of doing business, the paperwork headache of maintaining records of the locations in which the employee worked. Want to avoid hours of compliance record-keeping? No problem, just go ahead and pay the highest rate.
Read that last sentence one more time. An employer can get out of the paperwork requirement as long as he or she pays the highest rate, which, ironically enough, completely contradicts the stated purpose of the three-tiered-minimum-wage approach.
Senate Bill 1532’s proponents assured legislators and the public that the new law would be simple and easy to follow. We don’t yet know how higher labor costs will affect the price of common goods and services, but at least know that the promises made by Oregon’s most powerful remain consistently unreliable.