On March 2, 2016, Governor Kate Brown signed Senate Bill 1532 into law, enacting a historic increase in the state minimum wage that will begin this year and continue through 2022.
Under the new law, which will take effect on July 1, 2016, the state will be divided into three “tiers”: rural areas, the Portland metro area, and all other parts of the state. Each tier will see an initial increase in the minimum wage on July 1, followed by incremental increases each year between now and 2022.
- In rural areas, the minimum wage will increase to $9.50 on July 1, and will thereafter increase by 50 cents each year, up to $12.50 in 2022. This tier includes employers in Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa and Wheeler counties.
- In the Portland metro area, the minimum wage will increase to $9.75 on July 1 of this year, then jump to $11.25 per hour in 2017, thereafter increasing by 50 to 75 cents each year, reaching $14.75 per hour in 2022. This tier includes all employers located within Portland’s urban growth boundary.
- In all other parts of the state, the minimum wage will go up to $9.75 on July 1, and will thereafter increase by 50 cents per year from 2017 to 2020, and then by 75 cents per year starting in 2020, hitting $13.50 per hour in 2022. This tier includes employers located in Benton, Clackamas, Clatsop, Columbia, Deschutes, Hood River, Jackson, Josephine, Lane, Lincoln, Linn, Marion, Polk, Tillamook, Wasco, Washington and Yamhill counties, as well as areas in Multnomah County outside Portland’s urban growth boundary.
Oregon’s law follows on the heels of minimum wages increases in several other states. But Oregon is the first state in the country to implement a tiered minimum wage system. The tiered system is the result of compromise between lawmakers, business interests and labor interests.
Ready or not, employers across the state must prepare for an initial increase in the minimum wage this year, followed by an incremental but significant increase over the next six years.
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