Legislative Update

HB 3753 – Increased Standard Deduction

What It Allows: Increases the Oregon standard deduction allowed for personal income taxpayers, reducing taxable income and increasing take-home pay.
Impact on Employers: This could ease financial stress for employees, potentially reducing wage pressure. However, it may also affect state tax revenue, which could impact public services and funding for workforce programs.
How Employers Can Help:
- Educate employees about potential tax savings and how it affects their paychecks.
- Encourage employees to review and adjust their W-4 withholding if necessary.
- Stay informed about any updates to payroll tax tables.
Status: Pending review in the Oregon House Revenue Committee.

HB 3914 – Tip Income Tax Exemption

What It Allows: Creates a personal income tax subtraction for tips received by workers in hospitality and service industries, allowing them to keep more of their earnings.
Impact on Employers: This could help attract and retain workers in service sectors facing labor shortages. However, it may prompt discussions about wage structures and employer reporting obligations.
How Employers Can Help:
- Ensure payroll systems are updated if the bill passes.
- Provide clear guidance on how tip earnings and reporting requirements might change.
- Work with payroll providers to confirm compliance with tax adjustments.
Status: Under review in the Oregon House Revenue Committee, with industry groups voicing support.

HB 2234 – Overtime Pay Tax Exemption

What It Allows: Exempts overtime pay from personal income tax, reducing the tax burden on employees who work extra hours.
Impact on Employers: This could encourage employees to work additional hours, helping to fill staffing gaps. However, it may also create an expectation of more available overtime opportunities.
How Employers Can Help:
- Communicate with employees about potential changes to overtime pay.
- Ensure HR teams and payroll providers are prepared to handle new tax exemptions.
- Review staffing and overtime policies to balance employee expectations with business needs.

SB 916: – Unemployment Benefits for Striking Workers

Allows striking workers to collect unemployment insurance (UI) benefits after two weeks of striking.
Employers may collect overpayments and reduce back pay if workers are eligible for both UI benefits and back pay in a final contract.
Status: Passed the Senate (16-12); now facing opposition from public employers and school districts in the House.

SB 426: – Contractor Wage Liability

Would impose joint and several liability on property owners and general contractors for unpaid wages.
Includes unpaid wages, fringe benefits, penalties, and attorney fees, meaning general contractors could be held responsible for a subcontractor’s wage violations and vice versa.
Impact: Increased financial risk for developers and contractors managing subcontractor relationships.

SB 468 & SB 1139: – Restrictions on Non-Compete and Non-Solicitation Agreements

SB 468: Would make non-compete agreements with health care professionals void and unenforceable (mirroring laws in other states).
SB 1139: Would apply the same statutory requirements for non-compete agreements to non-solicitation agreements.
Impact: Employers in the healthcare sector and other industries may need to revise employment contracts.

SB 906 & SB 968 – Payroll Transparency & Overpayment Limits

SB 906: Requires employers to explain paystub codes with clear details to employees.
SB 968: Limits how and when employers can recover wage overpayments:
Employers must act within 90 days of discovering an overpayment.
Recovery is capped at 5% of an employee’s gross wages per pay period.
Impact: May require payroll system updates and policy changes.

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