Oregon state senators have advanced a bill that would temporarily allow more low-wage workers to keep full unemployment benefits while working part-time.

House Bill 3178 passed out of committee Thursday and now goes to the full Senate for a vote. It’s already passed the Oregon House.

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HB 3178 presents a fix to a measure passed in a special session last year. That measure, Senate Bill 1701, was meant to make it easier for people to begin picking up work without losing benefits. SB 1701, on paper, allowed people to earn up to $300 a week before their weekly unemployment benefit was reduced.

But there was a glitch.

“There was a technicality that we didn’t catch in the special session and we’ve been trying to fix it ever since,” said Rep. Paul Holvey, D-Eugene, the new bill’s sponsor, at a hearing earlier this year.

The first measure failed to amend the state’s definition of “unemployed” in a crucial way. Say a person got part time work. Under current law, they’d only be considered “unemployed” if that work paid less than their weekly benefit amount.

In Oregon, regular unemployment benefits start at $157 per week.

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That meant people receiving the smallest benefits couldn’t take advantage of the new measure — because earning $300 in a given week would mean they weren’t unemployed. It would disqualify them from receiving benefits that week.

The result, according to the new bill’s proponents, was that low-wage workers who needed the most help returning to work didn’t get it.

“What we passed helped people on unemployment that made more than $300 a week (in benefits),” Labor Commissioner Val Hoyle said at the hearing, “and not those workers who are most vulnerable and are making the least.”

Lawmakers have worried that the prospect of losing benefits could discourage workers from taking part-time jobs, as businesses and the economy reopen.

The Oregon Employment Department supports HB 3178. The Oregon Restaurant & Lodging Association does too.

Jason Brandt, ORLA’s president, said many hospitality workers still face barriers returning to their jobs — or are still getting comfortable interacting with the public. Once they can work, he said, it should make financial sense.

“This creates a little more flexibility for people to pick up a couple more shifts at a time when workers are hard to come by,” he said, “without it disincentivizing them in terms of staying whole on the unemployment insurance side.”

HB 3178 would change the definition of unemployment until Jan. 2, 2022.

If it becomes law, the measure is expected to cost the state’s unemployment insurance trust fund $75 million over the next biennium. The Employment Department does not expect that impact to increase employers’ payroll tax schedules.

The agency said fewer than 20,000 people would benefit from the bill.

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