Oregon minimum wage, hotel tax going up July 1

PORTLAND, Ore. – New laws kicking in Friday will give a slight boost to the paychecks of more than 100,000 low-income Oregonians while tourists and vacationers will have a little less spending money in their wallets.

Under the changes enacted by the Legislature earlier this year, the current 1 percent tax on hotel stays in Oregon will nearly double and the state’s $9.25 hourly minimum wage will climb by 50 cents in two of three newly-created geographic regions – metro Portland and smaller cities such as Eugene and Salem – and 25 cents in the third area’s rural communities located mostly east.

The lodging tax hike to 1.8 percent, which will slip to 1.5 percent in four years, will help create a $25 million-subsidy for the 2021 World Track and Field Championships in Eugene and provide additional state tourism funds.

Friday’s wage increase is the first of seven happening annually through 2022, when metro Portland’s minimum will top $14.75, smaller cities at $13.50 and rural areas at $12.50.

With the federal $7.25 minimum unchanged in seven years, unions and labor groups have recently been pressing states and localities nationwide to make up the slack. A dozen state legislatures did so in 2014 and 2015, and this year California and New York became the first to adopt $15 hourly minimums, higher than any other.

Oregon falls short of $15, but it’s the first state to toss the flat, statewide minimum for a tiered approach by region, where the differing wage rates are based on each area’s unique costs of living and other economic factors.

“In the past six years, the number of people moving to Oregon has increased by 10 percent while much of our state’s job growth is happening in the low wage sectors of the economy. Combine that trend with housing costs skyrocketing and we have a problem,” Tom Chamberlain, president of the Oregon AFL-CIO union, said in a statement. “Solving that problem requires a multifaceted approach, and raising wages is central to that approach.”

Instructions for businesses with employees who work across two or all three regions, such as delivery trucks and landscapers, were crafted by the state labor bureau, which released the final rules two weeks ago after weeks of public hearings and debate.

Workers earn the wage from whichever region they spend more than half their time, the rules say, and if their schedules are more spread out, bosses can either pay by hours worked in each region or the highest rate of whichever region they work.

Senate Republicans, who tried blocking the wage law during February’s legislative session along with their House colleagues, blasted the rules as an “hour-by-hour GPS-like employee tracking” that put expensive burdens on businesses.

“These new rules show an acknowledgement that (the labor bureau) disregarded legislative intent and created a mess for employers,” Ted Ferrioli, Senate GOP minority leader, said in a statement Friday. “Oregon small business owners are already struggling to comply with numerous expensive new mandates from the Legislature.”

Labor Commissioner Brad Avakian defended his agency’s minimum wage rules.

“Our agency developed rules that provide basic fairness to both employers and employees as Oregon raises its wage floor for more than 100,000 workers around the state,” said Avakian, a Democrat who is also running for secretary of state. “Today’s wage increase will mean fewer families living in poverty and more consumer dollars spent on local goods.”