Agency seeks to put off deadlines until 2023, but lawmaker says 'they failed in their duty.'

Lawmakers are considering a request from the Employment Department to delay the start of contributions and benefits under Oregon's paid family leave program.

House Bill 3398 would reset the start of contributions by employers and employees to a new fund by one year — from Jan. 1, 2022, to Jan. 1, 2023 — and the start of benefit payments from Jan. 1 to Sept. 1, 2023.

But the bill drew resistance from some lawmakers during a House Rules Committee hearing on May 20. The committee has scheduled potential action on May 27.

Under the Oregon program, which lawmakers approved in 2019, workers who earn at least $1,000 during the previous year would qualify for up to 12 weeks of paid family leave, maximum benefit set at $1,215 per week. Employers would contribute 40%, and employees 60%, based on payroll deductions.

Acting Director David Gerstenfeld said the agency needs more time to integrate the contributions from employers and employees into the first phase of its computer modernization project, which now will get underway starting in July.

"The original statutory timelines were created before a lot of work had been done to see what would be needed to built the technology and the work processes to make it successful from the day it becomes available to the public," Gerstenfeld told the committee. "Also importantly, it was before the pandemic."

Gerstenfeld had been director of the new program for just a few months before Brown fired Kay Erickson as Employment Department director on May 31, 2020 — a few months into the pandemic and resulting economic downturn — and named Gerstenfeld acting director. Gerstenfeld had been director of its unemployment insurance division from 2011 until he was shifted to the new program.

Though the family leave program had separate staff, Gerstenfeld said some were experienced in benefit programs. Like him, they were shifted back when Congress created new unemployment benefits in the CARES Act and the agency faced an avalanche of claims from workers at the onset of the coronavirus pandemic.

"It slowed down our progress in implementing the program," he said. "It did not stop it. We still had many employees working on it, but it was a major distraction and we made slower progress."

That explanation did not sit well with Rep. Marty Wilde, D-Eugene, who isn't on the Rules Committee. He suggested that the program could be transferred to another agency, possibly the Bureau of Labor and Industries.

"By their own standard, they failed in their duty," he said. "You do not get a year behind overnight."

Wilde questioned why the agency waited so long into the current session to seek a delay. Gerstenfeld said that while he kept some lawmakers and member of the family leave advisory council informed, he was unsure until recently what dates should be recommended for the new deadlines.

Wilde was supported by House Minority Leader Christine Drazan of Canby, one of seven Republicans who voted to create the program in 2019, and who sits on the committee. (Thirteen Republicans opposed it, and two did not vote; all 38 Democrats voted for it.)

Rep. Paul Holvey, also a Democrat from Eugene who sits on the Rules Committee, said the original timelines in the 2019 law were ambitious and the coronavirus pandemic last year did not help.

"It swamped the agency. It is no fault of theirs or ours," Holvey, who's also chairman of the House Business and Labor Committee, said.

"I think it would be an incredibly ill-advised move to try to move this program to another agency. I appreciate that they want the time to get it right. If we start up this program and rush it at this point, I think it would be catastrophic if there were mistakes for both employers and employees."

His view was supported by Paloma Sparks, vice president and general counsel of Oregon Business & Industry, which did not testify either way on the 2019 law. Sparks sits on the council advising the agency about implementing paid family leave.

"If there was a move to start over again, I think a lot of employers would be grateful for more time," she said. "But that is what you would be doing. It would start the process over again.

"What we do not want to see is a system put in place that is rushed and done incorrectly. If we are going to do this, we need to do it right."

President Joe Biden has proposed a national program of paid family leave as part of his $1.8 trillion American Families Plan. Its cost would be paid from increased taxes on upper-income households. He also proposes 12 weeks of benefits at $4,000 per month, less than what the Oregon program envisions.

Gerstenfeld told reporters during a May 5 conference call that he hoped federal legislation would allow Oregon to proceed with its own program. Eight other states and Washington, D.C., have started or are preparing similar programs.

Gerstenfeld said it is possible that federal legislation would provide them with some federal support.

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NOTE: This story was originally posted on May 21 as part of a longer story about the Employment Department's computer modernization project. It has been reposted with some additional information.

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