The Oregon Legislature’s mini-session ended on March 6, 2026, and produced more changes, regulatory requirements, and taxes for Oregon’s employers. While timing of voting on the gas tax referendum for funding of the State’s Department of Transportation was perhaps the most-discussed issue (SB 1599), another high-profile issue was the passage of SB 1501, authorizing issuance of approximately $365 million in bonds to support renovations of the Portland Rose Quarter’s Moda Center through an Oregon Arena Fund. These two bills are expected to impact the State’s budget in coming years.
Garnering less attention, several measures were passed that affect employers directly and immediately. Here is a round-up of the most notable bills for employers:
HB 4027: BOLI Funding Tax Bill
This new legislation, called the “BOLI Expenses Fund,” adds a new employment payroll tax that is to be paid equally between employers and employees. The initial tax rate has not been established but is intended to be used to fund the Bureau of Labor and Industries (BOLI). The Department of Consumer and Business Services (DCBS) Director is expected to set the tax rate at approximately $0.002 cents per hour worked. The goal is to collect at least the greater of: 12 months of projected expenses or $4.25 million by 2029, and $9.5 million by 2031. Monies collected will be separate from the State’s General Fund, and interest earned credited to the BOLI Expenses Fund. If DCBS determines that the requisite 12-months reserve for expenses is too low, a process is created to propose a plan to increase the reserves, which presumably will involve an increase in the payroll tax rate. Revenue generated from the new tax was reportedly intended to fund BOLI’s current staffing levels; however, the bill actually anticipates funding for new positions by 2031. BOLI has for several years indicated that its staffing levels are inadequate and it is short-handed, so look for this tax to increase in coming years. Notably, this is one of few payroll taxes that is intended to directly fund a department’s own staffing, as opposed to funding programs and taxpayer or employee benefits, which could be a trend in future legislative sessions. Note, as of this writing, the Governor has not yet signed this bill but is expected to do so.
HB 4089: Wage Claim Criminal Penalties Bill
This legislation began as a proposal to impose criminal penalties for any wage law violations, including potentially a single missed meal break or rest period, and was extremely overbroad and concerning for employers. During the session, the terms of the legislation were pared down to focus only on the intended subset of employers of concern: contractors and subcontractors who are routinely violating wage laws through using unlicensed construction labor contractors. The pared-down bill amends the crime of theft of services to include persons intending to avoid full or partial payment of compensation for a person’s services. The bill added a Class A misdemeanor for direct contractors or subcontractors who “knowingly enter into a contract with a construction labor contractor who is not properly licensed.” The bill also makes it a Class C felony if the direct contractors or subcontractors have a prior conviction for the same offense. A related bill, HB 4012, directs the Construction Contractors Board and the Bureau of Labor and Industries to carry out “assessments” of the use of unlicensed labor contractors at construction job sites, making surprise construction job site inspections more likely.
Note, as of this writing, the Governor has not yet signed this bill but is expected to do so.
HB 4111: Immigration Retaliation Bill
This legislation addresses one of the most high-profile issues during the legislative session: immigration law enforcement. The first portion of the bill revises the Rules of Evidence in Oregon Courts to prohibit evidence of a party’s or witness’s immigration status in a civil case unless the status is essential to prove an element of a claim or defense. If evidence is expected to be used because it is essential to a claim or defense, the party seeking to use the evidence must submit a pre-trial motion and the evidence at least 15 days before the case is heard. In cases involving awards of reinstatement to a job or future wage losses, and the plaintiff is the subject of an immigration final order of removal or lost federal work authorization, evidence of these facts are to be submitted by post-trial motion and not during trial. The impact of this provision will largely be seen in the courtroom.
Separately, the legislation also adds new employment protections for employees who are updating their personal information with an employer based on a change in the employee’s federal employment authorization documentation. An employer taking any adverse action against any employee because the employee submits such change in information, or attempts to submit it, is committing an unlawful employment practice. However, employers and third-party benefits administrators can still take actions necessary to comply with federal work authorization verification processes, and employers are not responsible for third-party benefits administrators’ actions.
Finally, the legislation adds “immigration status” to the list of conditions considered improper “profiling” by law enforcement. Law enforcement is generally not permitted to “target” an individual for suspicion of criminal activity based solely on profiling of the person’s immigration status, age, race, ethnicity, color, national origin, language, sex, gender identity, sexual orientation, political affiliation, religion, homelessness, or disability, among other characteristics, except when such description is provided as part of an identification of a suspect.
Note, as of this writing, the Governor has not yet signed this bill but is expected to do so.
HB 4079: School Notification of Immigration Authority Presence Bill
Part of a series of the Oregon Legislature’s 2026 immigration-related bills, the first portion of this bill applies to school districts, education service districts (ESDs), and public charter schools, as well as those persons providing services to students at the schools as a contractor or agent or volunteer (“community-based service providers”). The bill requires that school districts, ESDs, and public charter schools:
- designate at least one school district/charter school administrator to confirm that a federal immigration authority has entered school property for immigration enforcement and provide “notice” of such presence in a form consistent with Attorney General model policies to be created;
- notify students, or student parent/guardian, when the school has provided information related to the student to a federal immigration authority;
- identify which grades of students will receive notice;
- provide a process for community-based service providers to receive notice;
- upon confirmation of federal immigration authorities’ presence, notify school employees; students who attend the school in the grades identified to receive notice; their parents/guardians; and community-based service providers;
- determine the notice contents and delivery requirements, which must be “provided as expeditiously as possible” via electronic communications, and must include the general location of federal immigration authorities and whether classes or operations are affected, but cannot include “personally identifiable information” and cannot disclose information that “may threaten the health or safety of the students or employees” of the district;
- comply with model policies; and
- conduct initial training and every two years thereafter.
The policy must be included in the student handbook and on the district’s website in culturally appropriate languages to communicate effectively. The bill provides immunity from liability for any claim for injury to person or property or death that results from an act or omission that is reasonable and made in good faith to comply with this law.
The second portion of this bill applies to higher education institutions, including public universities and OHSU, and requires their governing boards to adopt policies for providing notice when a federal immigration authority is confirmed to have entered a campus for immigration enforcement. The policy to be adopted must be consistent with Attorney General model policies, and is similar in requirements to the above requirements for school districts. The policy must include “reasonable efforts” to provide notice to a student when the university has provided the student’s information to a federal immigration authority. Notice of federal immigration authority presence must be provided to students and employees. Notice is not required if federal immigration authorities are merely escorting a person on campus for medical care or treatment. This portion of the bill also provides immunity from liability for any claim for injury to person or property or death that results from an act or omission that is reasonable and made in good faith to comply with this law.
Note, as of this writing, the Governor has not yet signed this bill but is expected to do so.
SB 1570: “Health Care Without Fear Act”
Another immigration-related bill, the first portion of this bill requires hospitals to adopt written policies and procedures to address how hospitals will respond if any law enforcement authority arrives at the hospital. Additionally, hospitals must identify “nonpublic areas” of their facilities, for purposes of law enforcement identifying what areas can only be searched with a valid search warrant.
Additionally, for all health care providers, this legislation also adds to the list of protected health information a person’s country of birth and immigration status. An exception is provided when the disclosure is required by state or federal law or court order.
Finally, this bill makes it an unlawful employment practice to take adverse action against, and prohibits retaliation against, any employee who shares state agency immigration-related educational materials, such as “Know Your Rights” materials or immigration legal services information, at their health care facility or hospital workplace.
Note, as of this writing, the Governor has not yet signed this bill but is expected to do so.
SB 1507: Federal Tax Code Disconnect Bill
Although this bill has more to do with taxes than employment laws, the legislation will definitely impact employers. The bill, which is expected to generate over $300 million in revenue, disconnects Oregon from portions of two recent federal tax code changes. The state will not recognize the new federal deduction for vehicle loan interest or a qualified small business stock exclusion. Additionally, the state partially will not recognize the “bonus depreciation” deduction provided for in recent federal tax code changes that allow businesses to deduct from taxable income the full cost of machinery or equipment in the first year. The federal tax code changes were intended to stimulate economic growth, however if the State of Oregon recognized all the changes, it argued there would be significant state budget shortfalls. However, the legislation is also expanding the state’s Earned Income Tax Credits to create new tax credits for businesses that create certain new jobs in the state.
Note, as of this writing, the Governor has not yet signed this bill but is expected to do so.
As these new laws take effect and agencies begin issuing guidance, we will continue to monitor developments and share updates on what they mean for Oregon employers. In the meantime, if you have questions about how these changes may impact your organization, please reach out to our employment team.
The legal issues impacting this topic are and will continue to be ever-changing (Employment Law in Motion!), and since publication of this blog post, new or additional information not referenced in this blog post may be available.
This article is provided for informational purposes only—it does not constitute legal advice and does not create an attorney-client relationship between the firm and the reader. Readers should consult legal counsel before taking action relating to the subject matter of this article.
