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Oregon proposes accounting fix to comply with new IRS guidance for paid leave
Summary
State labor officials told the Senate committee that an accounting method labeling contributions by source would avoid new payroll-tax liabilities from an IRS ruling and spare employers, workers and the trust fund significant costs; OED seeks narrow rulemaking authority in LC 2020.
Oregon employment officials on Tuesday urged the Senate Interim Committee on Labor and Business to approve a narrow legislative concept to let the Employment Department adopt rules creating an accounting system for the state's paid family and medical leave trust fund.
The department's acting paid-leave director, Juan Serratos, told the committee that a recent IRS guidance changes how paid-leave contributions and benefits are treated for federal tax purposes and could make employer-funded portions of medical-leave benefits count as wages. "The implementation would require thousands of system programming hours, which would cost $5,600,000 and about $20,000,000 annually in payroll tax…
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