Paid Leave Oregon 2023 contributions use the Social Security wage base ($160,200) instead of the 2023 maximum of $132,900 #10212

Summary

or_paid_leave_taxable_wages caps wages at gov.irs.payroll.social_security.cap in every year. For 2023, Oregon capped Paid Leave Oregon contributions at $132,900 of wages, not at the Social Security base ($160,200). The law moved to the Social Security base for contributions due on or after January 1, 2024. So PE overstates 2023 employee and employer contributions for wages above $132,900. 2024 and later years are correct.

(Found while reviewing #10154, which starts Paid Leave Oregon on January 1, 2023. Separate from #9952 and #10153.)

What the sources say

2023: a fixed $132,900 maximum

ORS 657B.150 (1)(c), 2021 Edition, PDF page 9:

(c) The total rate may not exceed one percent of employee wages, up to a maximum of $132,900 in wages.

ORS 657B.150 (9), same edition, PDF page 10:

(9) For purposes of subsections (1)(c) and (7) of this section, the director shall annually adjust the maximum amount of employee wages by the percentage increase, if any, in the Consumer Price Index for All Urban Consumers, West Region (All Items)

The agencies applied $132,900 to 2023 (no CPI change was made for that year):

• Oregon DOR, 2023 Oregon Combined Payroll Tax Report Instructions, "Tax rates and wage bases", PDF page 6:

  • The Paid Leave contribution rate is 0.01, and the wage base is $132,900.

• OAR 471-070-3020, "Contributions: Maximum Wage Amount", subsection (1) and Example 2 (Division 70 rules):

  (1) Wages are subject to contributions up to the maximum wage amount paid per employer each calendar year.

  Example 2: An attorney works full-time for a law firm and part-time for a marketing company throughout 2023. The maximum wage amount for 2023 is $132,900.

2024 and later: the Social Security base

ORS 657B.150 (1)(c), 2023 Edition, PDF page 9:

(c) The total rate may not exceed one percent of employee wages, up to a maximum amount in wages that is equivalent to the Social Security contribution and benefit base limit established by the United States Social Security Administration for purposes of the federal Old-Age, Survivors, and Disability Insurance program limits pursuant to 42 U.S.C. 430.

Note after ORS 657B.150, same edition, PDF page 10:

Note: The amendments to 657B.150 by section 6, chapter 292, Oregon Laws 2023, apply to contributions due on or after January 1, 2024. See section 16, chapter 292, Oregon Laws 2023, as amended by section 16a, chapter 292, Oregon Laws 2023. The text that applies to contributions due until January 1, 2024, is set forth for the user’s convenience.

Oregon Laws 2023, chapter 292 (SB 913), section 16, PDF page 11:

(3) The amendments to ORS 657B.150 by section 5 of this 2023 Act apply to contributions due on or after January 1, 2023.
(4) The amendments to ORS 657B.150 by section 6 of this 2023 Act apply to contributions due on or after January 1, 2024.

Oregon DOR, 2024 instructions, PDF page 6:

• The Paid Leave contribution rate is 0.01, and the wage base is $168,600.

$168,600 is the 2024 Social Security base, which PE already uses for 2024.

Reproduction (main, single filer, $200,000 wages, default employer_headcount 100)

from policyengine_us import Simulation
for y in [2023, 2024]:
    s = Simulation(situation={"people": {"p": {"age": {y: 40}, "employment_income": {y: 200_000}}},
        "households": {"h": {"members": ["p"], "state_code": {y: "OR"}}}})
    print(y, [s.calculate(v, y)[0] for v in ["or_paid_leave_taxable_wages",
        "or_employee_paid_leave_contribution", "or_employer_paid_leave_contribution"]])

employer_total_or_paid_leave_taxable_wages uses the Social Security base in the same way.

Expected

Cap Paid Leave Oregon wages at $132,900 for 2023 and at the Social Security base from 2024 (for example, an Oregon wage-base parameter for 2023 that falls back to gov.irs.payroll.social_security.cap from 2024). Add a 2023 test above $132,900 and a 2024 test above $168,600.