Wednesday, September 7, 2016

No on 97 – Oregon’s Largest Tax Proposal Ever

In a few short weeks it will be hard to miss the battle taking place on Oregon’s ballot between those
advocating for more tax revenue for state government versus those against it. The $6 billion tax increase proposal is the largest in state history and would be paid on the sales of products and services that Oregonians buy every day. The projected cost for the average Oregon household totals over $600 a year.

For months, Oregon Restaurant & Lodging Association has been officially opposed to Measure 97 (previously known as Initiative Petition 28). In partnership with consumers, families, small and large businesses, and organizations from across Oregon, ORLA will fight hard against this tax proposal and the harmful impacts it would have on our great state. Our biggest concern continues to be the impacts the measure will have on disposable income given the industry’s reliance on the ability of Oregonians to eat out on a regular basis. In addition, direct increased costs relating to food and utilities in particular will further disrupt the fragile profit margins our members are working hard to protect.

 We want all industry members to take the time to learn more about the proposal and engage in conversations with friends and family to discuss what’s at stake. In one of the most glaring mistakes, you will see proponents in favor of the measure praising the tax for its ability to boost dollars for education when nothing in the structure of the measure guarantees that any of the tax revenue would actually be spent for that purpose.

Given our recent track record with Cover Oregon and other wasteful government programs, my hope is that there is common agreement across party lines that cutting a blank check for over $6 billion to our state government might not be the wisest decision.

There is a wealth of information available online to digest at your own pace as you prepare to make decisions about your views on Measure 97 this election year. For me personally, the independent study conducted by the Legislative Revenue Office takes the cake. It concludes that if Measure 97 were to pass, Oregon would lose over 38,000 private sector jobs.

 These facts may give you confidence that Measure 97 has very little chance of passing but we cannot rest on our laurels or become complacent about the real threat it poses to disposable income flexibility for Oregon families and increased costs for your business. In order for our industry to continue its impressive pace of growth and success, damaging measures like Measure 97 must be defeated and defeated soundly. It is time to send a message that massive tax increases on the backs of working Oregonians will not result in a better Oregon. Instead, it creates larger rifts between private sector businesses who churn our state economy and the Oregonians working hard as part of the public sector.

This fight at the ballot box will further sever those relationships so please take the time to educate yourself on the realities of Measure 97 without becoming part of the animosity or ill will that pits Oregonians versus Oregonians.

Please take the time to visit to learn more about the coalition we are officially a part of and how you can be involved. Let’s stand together against harmful proposals and continue building a stronger Oregon for our children and grandchildren. | Jason Brandt, President & CEO

Friday, September 2, 2016

The Changing Face of American Business

Changes in our country relating to overtime work are finally upon us. As of December 1, 2016
employers will be required to pay employees classified as exempt from overtime a salary of at least $47,476 a year or $913 a week. If an employee currently defined as exempt does not make $47,476 a year then they will be eligible for time and a half pay for all hours worked in a week over 40 hours just like non-exempt employees. The new federal law is putting immediate pressure on the hospitality industry to determine what changes to make, if any, to labor structures within their operations.

Recently the Oregon Restaurant & Lodging Association conducted an online survey of members to provide insight to operators on how their peers plan on handling such a significant change in labor law requirements.

A staggering 45 percent of respondents will be reclassifying current “exempt” employees as “non-exempt” employees and will pay overtime for any work in a week over 40 hours. Over 41 percent responded to our question relating to labor changes by clicking “other” with the majority saying the new rule will not apply to their current business as they do not employ exempt employees. The second most popular answer of those clicking “other” appears to be a hybrid approach. For exempt employees close to the new $47,476 a year threshold they may move them up to that new salary standard to keep intact their salaried position and the flexibility to work over 40 hours as needed in the business without a labor cost obligation of paying time and a half for those additional hours. For others not close to the threshold, they may be reclassified and held to 40 hours a week of work or less. And lastly, 14 percent of respondents will continue classifying their managers as “exempt” employees and raise their salaries to the $47,476 threshold so overtime pay does not apply.

As the results show, very few operational tactics are one-size-fits-all in their execution. We are an industry filled with wide ranging business models, target audiences, operational margins, and company cultures. We continue to hold the rank of being the second largest private sector employer in Oregon behind healthcare. These changes in how business is conducted can and will have unintended consequences. One of the more concerning outcomes are any changes made to those in transitional positions working hard to acquire the skills to become a manager.

It begs the question, who is ultimately responsible for professional development? The overtime rule was implemented by the U.S. Department of Labor to create forceful direction to employers who were “underpaying” managers while working them 50-60 hours a week without overtime pay. But what about the hard working 20-somethings eager to work those extra hours as an assistant manager to develop professionally? Who is responsible for the new limitations put on their ability to pursue that general manager position? Will they hold the government responsible or their employer for their unwillingness to pay them overtime to develop those skills?

Like most things in life, I believe the answer lies in the middle. Businesses will adjust as they always do and sacrifices will be made to employee morale when reclassification to hourly positions from salaried positions takes full effect. But those that will succeed will find creative ways to create professional development opportunities in place for employees looking to move up the ladder. Some will choose to incorporate aspects of managerial training within the constraints of the 40 hour work week while others may choose to pay the new $47,476 a year salary or simply pay overtime from now on for any necessary training hours beyond 40 hours a week.

The face of American business is changing and we are committed to doing our part to share helpful information about how savvy businesspeople are choosing to adapt to those changes.

Keep informed at | Jason Brandt, President & CEO