It's summer! And summer in the Pacific Northwest means sunshine, waters warm enough to raft in, cookouts with family and friends, hiking beautiful mountain trails, trips to the coast......and payroll changes. Wait what?! Well okay...thankfully that last one isn't an annual tradition. But unfortunately, employers in Oregon will have to reckon with some payroll changes that are just around the corner. Below is our round-up of things for Payroll Administrators to address before working on their tans.
Effective July 1, 2022: Minimum Wage Increase
It is hard to believe how fast time is flying by, but July 1, 2022 will mark the seventh consecutive year of Oregon's minimum wage increase schedule. Are you prepared for this next adjustment? Following are the new rates taking effect, by region:
- Portland Metro area within the urban growth boundary: $14.75
- Standard minimum wage: $13.50
- Rural Oregon: $12.50
If you are unsure which region your county is in, the BOLI website has a map that can help you make that determination. You will also want to be sure to update your Oregon Minimum Wage Worksite Posters.
Effective July 1, 2022: IRS Increases Mileage Reimbursement
Has anyone else noticed increased gas prices lately? (That is my joke for the day, though it gets less funny the closer you get to a gas pump!) Driven by increasing energy costs, another change that goes into effect July 1st is an increased mileage reimbursement rate, announced by the IRS, for the remainder of 2022. The new rate increases $0.04 from the rate at the start of the year to 62.5 cents per mile. This is an optional reimbursement rate for employers to use for the operating of personal vehicles for business purposes, in lieu of tracking actual costs. The standard rate will be reviewed this fall for the next calendar year.
COMING SOON! Oregon Paid Family and Medical Leave Insurance (PFMLI)
Another employer responsibility that is on the horizon and quickly approaching is Oregon Paid Family and Medical Leave Insurance (PFMLI). January 1, 2023 is the scheduled launch date and when employer and employee contributions for all Oregon employers will begin. Contributions will be 1% of an employee’s wage and can be split between employers' (40%) and employees' (60%) payroll deductions, or employers can elect to pay the entire premium. Employers with under 25 employees are not required to pay the employer portion but are still responsible for the employee withholding amount and submission.
This program entitles workers to take up to 12 weeks of paid time off for family, medical, and “safe” leave. Employees will receive 100% of their wages up to 65% of the state’s average weekly wage (SAWW). Over 65% of the SAWW, an employee will receive 50% of the individual’s average weekly wage to the maximum benefit amount of 120% of SAWW.
Employees will be able to make claims for leave beginning in September 2023. To be eligible for a claim, employees will need to experience a qualifying event, complete an application, earn at least $1,000 in wages in the past year, and contribute to the paid leave trust fund through payroll deductions.
Employers will have the option of participating in the state-run program or opting out as long as they offer a fully-insured or self-insured private plan with equivalent or better benefits.
What's your plan?
So now that you know what needs to be done, how are you going to do it? If your company struggles to implement payroll changes like these - which seem to happen with increasing frequency - give us a call. We're Human Capital Management specialists who can help advise you on the best practices and technologies to solve your HR, Payroll, and Labor Management challenges. Let us help you minimize your time generating quality payrolls and maximize your time enjoying the weather.