Oregon Paid Leave Update & Bargaining New Retirement Incentives

Paid Leave Oregon Goes Live This Year!

In 2019, Oregon legislators passed a bill to create a statewide paid family and medical leave insurance program (HB 2005). That program, now known as Paid Leave Oregon, goes live this year.

Paid Leave Oregon provides up to 12 weeks of paid parental, medical (for one’s own or a family member’s serious illness), and safe leave (for survivors of sexual assault, domestic violence, or stalking). Eligibility is expansive and includes all Oregon workers who earned $1,000 in the previous year – thus providing paid leave to thousands of workers who previously had none, which is good for Oregon workers overall. However, now UO faculty will have a deduction from their paycheck for a benefit largely overlapping with benefits we already won through collective bargaining. We are currently negotiating with the university to pick up the employee share and keep salaries whole during leave.

Under the new law, benefits are to be funded through a payroll contribution of 1% of gross wages. That rate is set annually and may be lower in future years, but cannot exceed 1%. The employer must contribute, at minimum, 40% of that 1%, with employees contributing a max of 60% of the 1%.  Employers can cover more than 40%. Payroll contributions for the state-run plan began on January 1, and workers can apply for benefits beginning September 3.

The law also allows employers to opt out of the state-run plan, so long as they provide the same or greater benefits via their own or a fully insured equivalent plan purchased through an insurance company. While this takes those participants and their payroll contributions out of the state plan pool, it also allows employers to hold off on any payroll deductions until benefits become available in September. The UO administration announced last November that they are pursuing a fully insured equivalent plan with the Standard Insurance Company, and that payroll deductions would begin in September 2023.

Oregon labor law provides for an expedited off-cycle bargaining process when changes to state law or other policy impact certain working conditions. UA leadership has been engaged in this “impact” bargaining since December, meeting jointly with leaders from the GTFF. We are excited to undertake this process in solidarity with our GTFF colleagues.

For United Academics, this impact bargaining on paid leave is also an extension of our new CBA. Implementation Agreement 4 in Appendix 1 enshrines our agreement “to discuss the impact of the statute for bargaining unit faculty members, if any. Such discussion may also include the need for and implementation of a donated sick leave pool for bargaining unit faculty members. Final agreement between the parties, if any, to modify this Agreement will be specified in an MOU.” Improving our system of leaves and creating a donated sick leave pool (DSLP) has been a UA priority for years. To that end we put forward a substantial proposal for Article 32 (Leaves) at the bargaining table in April 2022 (see the relevant language in Sections 8-16 of the proposed article).

In the context of our current impact bargaining, earlier this month UA and the GTFF presented a joint proposal calling for the administration to pick up the full cost of the insurance program and to ensure continuity of full pay when employees are applying for and receiving benefits under the program. We feel strongly that, in a time of high inflation and low employee morale (as indicated by the recent climate survey), and in the wake of several years of workers consistently going above and beyond to serve our students, this is a chance for the administration to demonstrate – in material terms – that it truly values its employees.

It is also worth reiterating that both unions have already secured paid parental leave as part of our current collective bargaining agreements, so under the UO’s proposed plan, our members would now pay for a benefit that largely overlaps with existing benefits.

It’s unclear how much an equivalent plan would actually cost to run on our campus given the existing benefits. Faculty and graduate students already have lower take-up rates than other employee groups for the similar benefits already in place. Although neither we nor the administration know what the actual cost to Standard Insurance will be for providing the Paid Leave Oregon benefits to our members, our understanding is that the UO administration is planning to pay Standard Insurance the full 1% of payroll (the maximum allowed under the new law), with the potential to renegotiate the rate down the road.

Our position is that the UO administration should use its leverage to seek a more favorable rate for this third-party plan than the full 1% allowed under the law, and that the institution should assume the payments to Standard Insurance for the equivalent plan–especially given the uncertainty involved.

Indeed, we hope that the UO administration will follow Lane Community College’s lead in committing to pay the entirety of the employee payroll contributions for Paid Leave Oregon on behalf of their faculty and staff.

To date, the administration has indicated that it is not interested in moving from the 60-40 split for the payroll deductions and that it is too soon to negotiate many of the finer details of the equivalent plan or its implementation.

We’ll  keep you in the loop as these negotiations continue in the coming weeks.

Bargaining New Retirement Incentives

Because Federal age discrimination laws ban mandatory retirement ages, there is no stick to force faculty with lifetime tenure to retire. Instead, universities typically offer some sort of carrot, in the form of cash buyouts, gradual retirement, health benefits, or combinations of these, in exchange for giving up tenure.

At UO, the carrot has been the Tenure Reduction Plan (TRP). In a nutshell, faculty agree up to 3 years in advance to surrender their right to keep working in exchange for a 6% raise. Because PERS bases its most commonly used benefits formula on the last 3 years of salary, this is a significant benefit for those in the PERS retirement plan. For those in the Optional Retirement Plan (TIAA or Fidelity), the benefits are much less valuable. The difference amounts to about $3,000 for each year of retirement, for the average retiree.

In addition to this raise, TRP lets you keep teaching part-time after you give up tenure, for up to 5 years at ⅓ time (2 courses per year) at your increased salary, and you can collect retirement benefits while you work. This benefit is extremely valuable - two years of salary if you take it all, and, if you time the teaching right, you can stay on the UO’s health plan, for all but two months of the year.

The administration believes the extended teaching guarantee of TRP is too costly to the University and provides little benefit. They would like to replace it with a scheme whereby they can hire retired TTF back only if they want to, and at whatever wage they and the individual faculty agree to. During the last round of bargaining the administration proposed getting rid of the Tenure Reduction Plan in exchange for increasing the retirement raise from 6% to 8%.

The union rejected this proposal. We agreed instead to attempt to bargain a new retirement plan, with the goal of bringing it to the members for a vote by the end of last calendar year. This deadline has now been extended once at our request, and the administration  will probably ask to extend it again, perhaps until March.

In our discussions with the administration we have sketched out a TRP replacement, which we call the Retirement Incentive Plan or RIP (sic). The RIP would add a cash buyout option to provide a benefit to the ORP faculty on par with what the PERS faculty get under TRP. It would also replace the right to keep teaching, which is currently part of TRP, with an additional cash buyout. These buyouts could be exchanged for continued health benefits in a tax-advantaged way. The administration could then bargain with individual faculty to continue teaching as Pro-Tems after they have given up tenure, with the salary additional to  the buyout amount. Current faculty would continue to have the right to choose the current TRP, for some number of years.

While the administration seems receptive to this plan, the sticking points are the amount of the buyout and the length of time the current TRP plan would remain an option. While we wait to hear the administration’s response, we would like to hear your comments and concerns. Please email them to [email protected] with the subject “retirement” or similar.