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OP-ED: State-mandated paid sick leave worrisome

DJC300This column originally appeared in The Daily Journal of Commerce in Buildings Bridges and Roads
By: Mike Salsgiver

Mike SalsgiverThe 2015 Oregon legislative session opened last month at an almost unprecedented pace, with over 1,400 bills filed before the first official day of the session on Feb. 2. Many Capitol veterans have commented that they cannot recall a session moving so fast with so many major bills appearing so early.

Many controversial bills that did not move in the 2013 session have become the first focus of this session­­. The Republican wave that swept most of the country with overwhelming force last November failed to reach Oregon, and the result has been a much more anti-business environment in Salem. Lobbyists are fighting intense, early battles to protect a construction industry that is seeing the first positive economic signs in more than six years.

One proposal that has found new momentum in both Salem and in Washington, D.C., is a proposal to require paid sick leave. This proposal is the central piece of a broader agenda to increase workplace benefits and flexibility for lower-income workers – a hot topic in the Capitol as of late.

While a valid concern for employees in many other industry sectors, the commercial construction industry is not the target here. Our industry is comprised of high-wage, high-skill jobs. Most examples given by proponents focus on low-income workers, especially women with children living at or below the poverty line.

As of 2014, in Oregon the average annual wage of a construction worker was $51,852 – 16 percent more than the average for a private-sector employee. Since construction is a particularly heavily regulated industry, most construction employers already provide some form of a paid-time-off policy in addition to paying higher wages.

Different parts of our industry handle benefits in different ways – union contractors work with collective bargaining agreements while all public projects are completed under prevailing wage law. Prevailing wage law requires fringe benefits to be paid either through a third-party trust arrangement or via cash.

If the mandated paid-sick-leave bill passes in a form that resembles the current version, it will affect Oregon’s entire commercial construction industry – whether the company is small or large, union or open shop. Because of this, it is crucial that our very mobile industry and workforce not be subjected to multiple and competing sick leave standards around the state.

As of today, both Portland and Eugene each has its own, unique mandated-paid-sick-leave ordinances. That means that a contractor has to meet one set of requirements to work in Portland, and another set to work in Eugene. To allow these cities to enforce their separate ordinances on top of a statewide mandate is simply unacceptable. A patchwork of inconsistent local ordinances highlights the need for the statewide bill to pre-empt all local governments from enforcing or approving any new sick leave laws.

AGC would also support the Legislature, declaring that all matters related to the terms and conditions of employment be decided at the state level and not the local level to ensure that Oregon businesses will not be subjected to similar situations in the future when debating issues such as flex schedules, child care leave and others.

Many administrative challenges of a statewide sick leave law are made worse by the unique workforce that makes up our industry. Each minute, hour, day, month or year, the work needed at a particular jobsite changes, as does the need for workers with particular skill sets. The short time frames in which employees must perform their work at different sites makes calculating accrual rates and general recordkeeping extremely complex.

For example, the Bull Run watershed is 26 miles from downtown Portland in the Sandy River Basin. While 96 percent of the lands are under federal ownership, 4 percent are owned by the city of Portland. Construction is currently and frequently taking place at Bull Run. This means that if the state law does not pre-empt local ordinances, employers will need to know whether employees are performing work within the 4 percent of the land owned by the city.

That need is similar to the one for a broad definition of a qualifying paid-time-off policy. In any given company, you will find various PTO policies, including general ones, vacation pay accounts, prevailing wage benefits and collective bargaining agreements. All of these should qualify as PTO policies that meet the statewide bill’s requirement and, therefore, exempt the company from the requirements of the bill.

Oregon’s bill also is tougher on small business – nearly 80 percent of all of Oregon’s businesses. Of the other sick leave policies in effect around the country, many require only small employers (fewer than 10 employees) to grant unpaid, not paid, sick leave, and some have exempted small businesses altogether. Oregon’s proposals would not make this exception.

Many of our smaller contractors cannot absorb this additional mandate without considering the need to make significant adjustments to their workforce or other harmful business choices. As an industry that is just beginning to see the light following the recession, it is essential that new laws not make economic conditions worse for construction.

Ours is an industry that pays high wages for highly skilled work. As we begin a slow recovery from the deepest recession in over 80 years, the continued increase in government mandates that interfere with the employer-employee relationship is harmful – not just to construction, but to all business sectors. While AGC does not support mandatory paid sick leave, if it does move forward, we hope the result is a bill that does the least damage possible to our industry and our members.

AGC is committed to the bill’s goal of promoting a sustainable, healthy and productive workforce while ensuring that businesses operating in the state can continue to be economically sustainable, meet the demand for construction projects and bids, and provide thousands of jobs to Oregonians. We believe we already meet these goals. We hope the Legislature will let us continue doing so without having to hurt ourselves in the process.

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

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