New 2014 Oregon business laws in effect

by J.L. Wilson
Associated Oregon industries

The new year brings with it new changes to business costs and regulations. Many of the laws passed by the Oregon Legislature are effective on the 1st of January. Your business association, AOI, is instrumental in the shaping of many of these policies.

Here’s a look at what changes are in store for 2014:

Generally, workers’ compensation insurance rates will decrease by over 7% this year. The Oregon Department of Consumer and Business Services (DCBS) has announced that Oregon’s “pure premium” rate will decrease by 7.6% in 2014. Oregon is now the 12th most affordable state in terms of workers’ comp costs.

Oregon’s minimum wage will increase 15 cents per hour this year to $9.10 per hour. Oregon has the second highest minimum wage in the nation behind only Washington ($9.32). Many Oregon employers are especially concerned about potential local “living wage” ordinances, but Oregon law prohibits local jurisdictions from enacting their own minimum wage laws.

Unemployment insurance taxes for Oregon employers will edge down slightly in 2014 as the Employment Department has determined the Unemployment Trust Fund is in a healthier and more stable position. The average tax rate will drop from 3% to about 2.75%. The rate for employers with minimal claims will drop from 2.2% to 1.8%. The rate for new employers with no claims history will drop from 3.3% to 3.1%. Unemployment taxes are employer-paid taxes on the first $35,000 of income per employee.

For C Corporations with net income between $1 million and $10 million, the corporate tax rate will remain at 7.6%. Corporations with net earnings between $1 million and $10 million were scheduled to see their tax rate reduced to 6.6% in 2014, but due to the “grand bargain” compromise struck by Republicans and Democrats in the October 2013 Special Legislative Session, the scheduled rate reduction will not take effect. Instead, S Corporations and LLCs will see significant tax reductions, but these reductions will not take effect until 2015.

The Portland Sick Leave mandate goes into effect. If your company has employees who work a minimum of 240 hours per year in Portland, no matter where your business is located, those employees are covered by the Portland ordinance. Employees covered under the ordinance must accrue a minimum of one hour of paid sick leave for every 30 hours worked. The Bureau of Labor and Industries (BOLI) will begin enforcement of ordinance this month, but is allowing latitude for employers to adjust to the complexities of the law. BOLI enforcement of the ordinance will be complaint-driven.

Electronic payroll systems are now allowed without employee approval. Although direct deposit payroll systems are becoming the norm, prior to this year, an employer was required to seek employee consent before moving from paper paychecks to an electronic payroll system. Starting on January 1, the requirement to seek employee consent has now been removed by the Oregon Legislature.

If you are a business covered by the Oregon Family Leave Act (OFLA), a qualified employee is now eligible for up to two weeks of unpaid bereavement leave following the death of a family member as part of the state’s family leave act. Oregon law requires companies with 25 or more employees in the state of Oregon to comply with OFLA.

Starting this year, employers must now give honorably discharged members of the uniformed services the option of taking Veterans Day off as either a paid or unpaid holiday. Some undue hardship exceptions are permitted.

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