Here are NFIB's top priorities for the 2020 legislative session.
With the 2020 legislation session kicking off in February, NFIB is working to shape public policy to the benefit of small business owners. Here are just a few of the issues NFIB will be watching closely during the 2020 legislative session.
Cap & Trade
NFIB and our allies have been fighting off efforts to pass a cap & trade bill for the last several years, so far successfully. If the Democrats try to push Cap & Trade through during the short session, the Republicans are likely to walk-out again. If that occurs, the chances of this bill (or any legislation) passing before Sine Die is very unlikely. The caucuses are extremely divided and unwilling to compromise due to the fact that they would be risking support from key constituencies that will be necessary to win elections in 2020. NFIB has joined the Partnership for Oregon Communities, a coalition of industry associations and local chambers of commerce, to engage in grassroots efforts and educate the public on the real costs of a program that will have insignificant impacts on global climate change.
Modifications to the Corporate Activities Tax (CAT)
The Oregon Legislature passed the new Corporate Activities Tax (CAT) during the 2019 session. It is estimated to bring in an additional $1 billion per year in dedicated funding for K-12 education. Rulemaking is on-going and will not be finalized until late spring of 2020. A series of temporary rules will be issued starting on the effective date of the tax, January 1. Subsequent temporary rules will be issued on February 1 and March 1. During the February session, there will be opportunities to make slight adjustments to the tax in an effort to provide clarity to taxpayers. Legislators seem uninterested at this point in making substantive changes that would have a significant revenue impact.
HB 2498 was introduced in 2019 and would have significantly altered Oregon’s current multi-part test to determine who is considered an employee versus an independent contractor by adopting parts of the Dynamex decision issued in April 2018 by the California Supreme Court—a decision that created a restrictive “ABC” test that continues to jeopardize work opportunities for millions of independent contractors in California. HB 2498 would have changed the current test to determine who is considered an employee versus an independent contractor in Oregon. It would have done so by adding a new question to the test: Is the worker’s service outside the usual course of business? If the answer is ‘NO’ then the individual would no longer be considered an independent contractor and will be reclassified as an “employee.”
Employer Health Care Assessments
In an effort to raise revenue for the Oregon Health Plan (OHP) which provides health care coverage to more than one million low-income Oregonians, the Oregon Health Authority and labor unions have proposed legislation that would require private employers to pay an assessment if their employees choose to be covered by OHP/Medicaid, or in some versions of the proposal, if their employees access any form of state government assistance. The most-current proposal asks employers to pay 50 cents per hour, per employee who works eight or more hours per week. Altogether, the proposal is estimated to generate $500 million in new revenue for the state.
State-Level Overtime Rule
There have been recent efforts at the state and federal levels to significantly increase the threshold by which an employee could start earning overtime pay. In September 2019, the U.S. Department of Labor announced its final rule, raising the overtime-exempt salary threshold for executive, administrative and professional employees from $23,660 to $35,568 annually (or from $455 to $684 per week) starting January 1, 2020. In Oregon, legislation has been introduced going even further, changing the annual overtime threshold to two times the state minimum wage (or between $45,760 and $52,000, depending on the regional state minimum wage, until July 1, 2020, when all three state minimum wage tiers increase again.)
Private Attorneys General Act
Common violations of Oregon’s labor laws include not paying overtime, failing to pay the minimum wage or more specific technical violations such as printing the wrong date or incomplete corporate name on a paystub. When this occurs, civil penalties are assessed by the Bureau of Labor and Industries (BOLI) and typically paid to the state. First enacted in California in 2004, the Private Attorneys General Act (PAGA) allows employees to hire private trial lawyers and sue their employers directly to collect a share of penalties associated with the violations. As a Private Attorney General, an aggrieved employee can seek civil penalties not only for violations suffered personally by the employee but also for violations toward other current or former employees, similar to a class-action lawsuit.
Prohibition of Drug-Free Workplace Policies
Since Oregon legalized recreational cannabis in 2015, efforts are underway by marijuana advocates to prohibit “discrimination” by employers for their employees’ off-duty use of legal cannabis. The only problem here is that there is still no test to detect impairment for marijuana, so the only way that employers can guarantee a drug-free workplace, which is required for some employers under federal and state law, is to have drug-screening policies in place to ensure that their employees are not impaired on the job. The passage of this legislation would put employers in a legal dilemma: face a potential negligence lawsuit when an accident occurs on the job or face a discrimination lawsuit for firing (or not hiring) someone that tests positive for cannabis.