Supporters urge higher wage replacement in workers’ compensation; MLAC/NCCI analysis pending

The Senate Committee on Labor and Business held a public hearing March 6 on Senate Bill 705 and its dash‑2 amendment, which would change how temporary total disability benefits are calculated under Oregon’s workers’ compensation system.

Under current statute, time‑loss benefits are calculated at two‑thirds (66 2/3%) of the lesser of a worker’s average weekly wage and the state average weekly wage, with a cap based on the state average. The dash‑2 amendment would make the wage‑replacement schedule more progressive by paying 80% of the portion of a worker’s wages that are at or below the state average weekly wage, and 66 2/3% for wages above the state average, while retaining the existing cap. The change would apply to claims or temporary disability that begin on or after Jan. 1, 2026.

Why it matters: Labor advocates and unions said the change would better preserve income for low‑wage workers who otherwise see a larger proportional income loss while on workers’ compensation, and could reduce financial pressure that discourages injured workers from filing claims or taking necessary time off to heal.

Testimony: Odessa Aguilar, political coordinator for Oregon AFSCME, testified in strong support of SB 705 with the dash‑2 amendment, saying the reform came out of MLAC conversations and would produce a more progressive time‑loss schedule. "Providing an increase in benefits while maintaining the cap allows for monies to be used for everyday living expenses," Aguilar said.

Katie Tyson of the Oregon AFL‑CIO also supported the amendment, noting statistics showing lower‑income workers bear a larger share of wage replacement losses under the current formula; she said the change should encourage eligible workers to file claims and allow them time and income to recover. Michael Randazzo, a Springfield resident, gave personal testimony about the hardship of losing a large share of income after a work injury, saying the current replacement rate left him borrowing money to cover basic needs.

Industry and fiscal review: The Associated General Contractors (Kirsten Adams) said AGC supports the policy goal but urged the committee to allow MLAC and the NCCI (National Council on Compensation Insurance) to complete an actuarial analysis before action. Committee staff indicated NCCI had received the dash‑2 amendment and an analysis was expected; staff noted MLAC would review the amendment following the hearing.

Next steps: Committee members said they expect MLAC and NCCI to provide fiscal and premium‑impact analysis. No committee vote was taken at the public hearing; the matter is expected to move through MLAC before further committee action.

Ending: The committee closed public testimony and left the bill pending further actuarial and MLAC review.