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Legislators promise benefits, employers have mixed feelings about impacts on small businesses

On Aug. 9, Oregon Gov. Kate Brown signed House Bill 2005, an ambitious piece of legislation that creates a paid family leave program affecting all Oregon workers. This plan drew bipartisan support in the Oregon Legislature, with the Oregon House of Representatives voting 45-13 in favor, and the Senate voting 21-6 in favor.

The law requires businesses to establish a fund that workers can draw money from if they need to leave work for family-related reasons such as a sick loved one or a pregnancy. Workers would be allowed to take up to 18 weeks of leave, 12 of which would be paid.PMG FILE PHOTO - Babica Hen Cafe owner Joe Buck was in favor of the paid family leave bill, and even testified on its behalf

State Rep. Andrea Salinas, D-Lake Oswego, sees the passage of this bill as "long overdue for all Oregon families."

"HB 2005 is a big leap forward for Oregon families. Whether it's the birth of a child, the serious illness of a spouse, or the end-of-life for a parent, we all need time to care for our families," Salinas said. "The U.S. is one of only a few countries in the world that does not provide time for workers to care for a loved one without losing wages. Now, Oregon families can take time away from employment without worrying about losing all of their wages."

Salinas notes the stipulation in the bill that workers will never pay more than 1% of their weekly wages into the fund; she says that most workers will contribute around 0.6% of their weekly wages and that lower income families will have 100% of their income paid if they have to take time off of work. To her, the tradeoff of this payroll deduction is well worth the potential benefit to workers.

Rep. Rachel Prusak, D-West Linn, concurs with Salinas's views, saying that "No one should have to choose between being at their loved one's side, or keeping their job. Paid family and medical leave insurance is a common sense, pro-family policy."

For Rep. Courtney Neron, D-Wilsonville, the bill is also crucial in how it helps some of Oregon's most vulnerable citizens.

"With HB 2005, Oregon is the first state in the country to include paid safe leave to deal with issues related to domestic violence, harassment, sexual assault or stalking," Neron said in an email. "In 2018, Oregon domestic and sexual violence programs receiving funding from the Joint Funding Process answered more than 128,000 calls for help from victims. This legislation supports and protects victims when they need it the most."

But families and workers are not the only people who will be affected by this major issue; business owners will now have a few years to adjust to comply with HB 2005, with the law taking effect Jan. 1, 2023.

Business owners across the south Portland metro area have conflicting views on this bill. Some business owners like Joe Buck, owner of Babica Hen Cafe, with locations in Lake Grove and Dundee, have been very supportive of the bill. Buck even testified in favor of it as it progressed through the Legislature.

"It is important to be aware of the myriad costs being placed on our important small businesses throughout the state, but in this case the benefits of paid family leave are well worth the shared cost," Buck said. "Furthermore, small businesses are currently at a particular disadvantage when it comes to being able to provide paid leave benefits that many large employers are able to afford. This bill levels the playing field a bit and enables everyone in the state to take family leave regardless of the size of business they work for or how much money they make per year."

But not all business owners are as enthused as Buck. Dan Slick, owner of Wilsonville restaurant Slick's Big Time BBQ, is highly concerned about the risks to small businesses. Although Oregon businesses with fewer than 25 employees are exempt from having to pay into the fund, Slick says that there are many complications that Oregon legislators have not considered.

"The biggest problem for us would be, you gotta hold a spot for somebody," Slick said. "Now I hire someone, which isn't easy, to go find somebody to fill in a gap for 12 weeks, three months, what if it's during our busy season?… Then they're gone and they have to come back and I have to hold their position and give them their job back." He explains that this wastes valuable time and resources on training temporary employees, who will then be let go after the original employee returns.

Neron, for her part, noted that employers with more than 25 workers will be compensated by the state ot help cover the costs of temporary replacements.

Yet acording to Slick, "These guys (legislators) don't consider all the logistics and problems that go along with just simply, 'oh, a 1% thing, that's gonna be great, a mild increase.' So we raise our prices." He said that mandated programs such as the paid family leave program often end up driving costs that are inevitably passed on to the consumer, and can hurt workers if hiring is slowed or stopped because of these increased costs. Additionally, he is very concerned that some businesses may freeze hiring or cut employees to stay under the 25 employee limit. Businesses employing around 25 people with tight margins may be hurt badly by having to pay into the fund, he said.

"That may just push them over the top of not being able to be profitable or willing to have to deal with that," Slick said.

Neron said she was confident that the law wouldn't prevent businesses from expanding.

"The benefits of expanding a business will most likely outweigh the minimal costs to the businesses when hurdling the 25 employee mark," she said.

Peter Hicks, an attorney with Jordan Ramis PC law firm, is well versed in the details of the bill. He is optimistic about the plan but notes some possible issues. He recognizes one of Slick's concerns, that employees with around 25 employees may consider delaying hiring, but said that in practice, businesses cutting employees to avoid certain laws is uncommon.

"Oregon families will have increased freedom to take leave as needed without fear of adverse economic consequences," Hicks said, while also acknowledging that "smaller employers may find it difficult to adequately staff positions when employees may be potentially absent for up to 16 weeks with paid and unpaid leave. On the other hand, the funding for the program is creative and provides a fair mechanism to pay for and administer leave by sharing the costs of funding the program."

Workers and business owners will need to wait until 2023 for their hopes and fears regarding the program to either be realized or allayed. Until then, Hicks recommends that businesses closely monitor any potential changes to employee rights laws and "be prepared to comply with any new rules and regulations."


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