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Oregon pays millions to unpaid workers

July 19, 2010

By Oregon Tax News,

Oregon is one of a few states that dedicates funds, paid by Oregon employers, to cover unpaid wages when a company fails and does not have money for payroll. Last year, the average payout was about $1,048 per worker. The fund pays amounts equal to unpaid wages up to a maximum of $4,000. Several incidents in the mid-1980s, when employees of distressed companies learned that banks were ahead of them in collecting debts, led to legislation that established a fund to protect workers. Since its inception, Oregon’s Wage Security Fund has paid more than $16 million in benefits to more than 16,000 workers.

Despite the tally of companies that went under in the past few years, Oregon has not seen a large increase in workers getting payouts from the fund. “We were expecting that we might see a real spike in claims, and it hasn’t happened. It might be because Oregon workers don’t know the fund exists,” said State Labor Commissioner Brad Avakian in a special report from the Statesman Journal.

During the 2009 Session, the Oregon State Legislature swept about $3 million from the fund and placed it in the general fund. The transfer was a part of the $89.9 million in funding that was shuffled from state funds and accounts to help plug holes in the budget, according to the Oregon Legislative Fiscal Office.

The balance in the Wage Security Fund, as of June 30, was more than $2.3 million down from about $3.9 million a year ago.

See also Oregon BOLI Q&A here

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