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DJC Op-Ed: Another business day, another government mandate

DJC Op-Ed: Another business day, another government mandate

By: Mike Salsgiver
Executive Director, AGC Oregon-Columbia Chapter

This article was published by the DJC on February 20 in Buildlings Bridges and Roads and can be viewed here (subscription required).

Paid family leave.

Daily Journal of CommerceIt’s yet another hot-button issue at the intersection of business and state and federal government that will yet again change the employer-employee relationship. The issue has made national headlines as President Trump, in last month’s State of the Union address, mentioned paid family leave and his support for such a proposal. The Trump administration earlier this month released its 2019 budget proposal, and it included a plan for mandated family leave.

Oregon will likely be one of the next states to implement such a law relating to paid family leave as our neighbor to the north passed its own legislation in July 2017.

While Washington’s law will not become fully effective until 2020, Oregon is gearing up to take a similar path. In Oregon’s 2018 legislative session, currently under way, a bill has been introduced to create a family and medical leave insurance program providing paid family leave. The proposed legislation would require the employer and employee to contribute to the fund.

This isn’t a new legislative concept for Oregon, as 2017 saw a similar proposal being introduced. Most likely there will be conversations among key stakeholders over the next year about how best to implement a statewide program as complex as paid family leave.

Our chapter represents commercial construction businesses in five and a half counties in southwest Washington state, where this change will impact a large number of our members.

Washington’s paid family leave bill, Senate Bill 5975, was the result of hard work done by Democrats and Republicans that incorporated input from the business and labor communities. The bipartisan group of legislators worked together, over several years, to meet in the middle. A compromise was reached and the bill will begin to pay benefits to Washingtonians in 2020.

SB 5975 establishes up to 12 weeks of paid family leave that will be funded by a 0.41 percent payroll tax, 67 percent paid by employees and 37 percent by employers.

So, what does the passage of SB 5975 mean for our southwest Washington members?

For Washington’s employers there are implications: employees can take up to 12 weeks of paid leave to take care of a new child or a sick family member, or to allow for the recovery of a disabling injury. The new law allows no more than 16 weeks of leave if using both. Weekly benefits paid to workers will be based on the percentage of their wages with a maximum of $1,000 per week. Those premiums will be collected beginning next year with benefits paid beginning in 2020. The premiums paid by employees and employers will fund the program.

An important note is that small businesses with fewer than 50 employees are exempt from paying premiums, but those employees would still pay into the fund and be eligible. There are additional provisions for small businesses, including self-employed individuals, being able to opt in, and grants of up to $3,000 available if certain criteria are met with an additional grant of up to $2,000 in other certain circumstances. Finally, companies that have a paid leave program in place may choose to opt out of the state program if their program is equivalent or better.

The importance of implementing a plan that has been effectively and thoroughly vetted by all affected parties cannot be stressed enough. On the heels of a highly collaborative process in Washington, Oregon would most greatly benefit from an equally collaborative process.

In any event, business will be involved in the debate, and the hope is that all invested will learn from Washington’s method for a highly effective process.

Mike Salsgiver is the executive director of Associated General Contractors’ Oregon-Columbia chapter. Contact him at 503-685-8305 or mikes@agc-oregon.org.

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