2026 Law Update: Navigating Updated & New Laws for Oregon and Washington Small Businesses and Nonprofits

As we move into 2026, many laws passed during recent legislative sessions in Oregon and Washington are now taking effect or beginning to meaningfully impact day-to-day operations. For small businesses and nonprofits, this year is about implementation, compliance, and planning rather than theory.

Below is a practical overview of the most relevant 2026 changes, organized by state, with explanations of what the law was before, what has changed, and how it affects organizations.

OREGON STATE: 2026 LAWS AFFECTING SMALL BUSINESSES AND NONPROFITS

Payroll Transparency Requirements

Law reference: Oregon Senate Bill 906
Effective date: January 1, 2026

Before
Oregon employers were required to provide itemized pay statements showing wages and deductions, but there was no requirement to explain what payroll codes, abbreviations, or deductions meant.

After
Employers must now provide employees with a clear written explanation of the information shown on pay statements. This includes types of pay, benefit deductions, payroll codes, and how wages are calculated.

How this affects organizations
Small businesses and nonprofits must update payroll documentation and onboarding materials. Employers using third-party payroll providers should confirm compliance. This law is intended to reduce wage disputes but increases documentation obligations.

Learn more
Oregon SB 906 text: https://olis.oregonlegislature.gov/liz/2025R1/Measures/Overview/SB906
Oregon Bureau of Labor and Industries wage and hour guidance: https://www.oregon.gov/boli/workers/pages/paychecks.aspx

Unemployment Insurance Eligibility for Striking Workers

Law reference: Oregon House Bill 2237 and related UI amendments
Effective date: January 1, 2026

Before
Workers on strike were generally ineligible for unemployment insurance benefits.

After
Certain striking workers may now qualify for unemployment benefits after a waiting period.

How this affects organizations
This change alters the risk landscape for organizations with unionized staff or collective bargaining agreements. Employers and nonprofits should consider how labor disputes may affect staffing, cash flow, and operational continuity.

Learn more
Oregon Employment Department legislative summary: https://www.oregon.gov/employ/Agency/Documents/2025/2025-Legislative-Summary.pdf

Transportation Funding, Gas Tax Increases, and 2026 Ballot Measure

Law reference: Oregon transportation funding package including HB 3991A
Status: Passed with referendum pending (ie. Not going into play but closely being watched)

Before
Oregon gas taxes, vehicle registration fees, and transit payroll taxes were lower.

After
The Legislature approved increases to the gas tax, vehicle registration and title fees, and payroll transit taxes. A voter referendum has qualified for the 2026 ballot, meaning some increases may be delayed or reversed depending on the election outcome.

How this affects organizations
Small businesses and nonprofits should plan for potential increases in fuel costs, delivery expenses, and payroll taxes while recognizing uncertainty until voters decide. Organizations with vehicles, delivery operations, or commuter-heavy staff may see the greatest impact.

Learn more
Oregon HB 3991A overview: https://olis.oregonlegislature.gov/liz/2025R1/Measures/Overview/HB3991
Oregon Secretary of State referendum information: https://sos.oregon.gov/elections

Expanded Consumer Protection Laws

Law reference: Updates to the Oregon Unlawful Trade Practices Act and related consumer protection statutes
Effective date: January 1, 2026

Before
Oregon prohibited deceptive trade practices, but enforcement was often complaint-driven and less prescriptive.

After
Consumer protection laws expand oversight related to billing transparency, financial services, debt collection practices, misleading marketing, and fee disclosures.

What this means in practice
Organizations that charge fees, bill clients or members, offer payment plans, accept donations tied to services, or market programs must ensure all pricing, terms, and representations are accurate, clear, and not misleading.

How this affects organizations
Contracts, invoices, websites, and marketing materials should be reviewed for clarity. Nonprofits are not exempt, especially when charging program fees or memberships. Even unintentional misstatements can create enforcement risk.

Learn more
Oregon Department of Justice Consumer Protection: https://www.doj.state.or.us/consumer-protection/
Oregon Division of Financial Regulation updates: https://dfr.oregon.gov

WASHINGTON STATE: 2026 LAWS AFFECTING SMALL BUSINESSES AND NONPROFITS

Minimum Wage Increase

Law reference: Washington minimum wage adjustment under RCW 49.46
Effective date: January 1, 2026

Before
Washington minimum wage in 2025 was $16.66 per hour.

After
The statewide minimum wage increases to $17.13 per hour, with higher rates in certain cities and counties.

How this affects organizations
Payroll costs increase across the board. Nonprofits with fixed grants or contracts should reassess sustainability and staffing models. Employers must update wage scales and overtime calculations.

Learn more
Washington Department of Labor and Industries minimum wage page: https://www.lni.wa.gov/workers-rights/wages/minimum-wage

Paid Family and Medical Leave Expansion

Law reference: Washington House Bill 1213
Effective date: January 1, 2026

Before
Paid Family and Medical Leave existed, but eligibility and job protection rules were narrower.

After
The law expands job protection rights and administrative requirements for covered employers, including additional notice and coordination obligations.

How this affects organizations
Employee handbooks and leave policies should be updated. Managers should be trained on PFML coordination. Employers may need to plan for longer or more frequent absences.

Learn more
Washington Paid Family and Medical Leave program: https://paidleave.wa.gov
HB 1213 bill text: https://app.leg.wa.gov/billsummary?BillNumber=1213&Year=2025

Expanded Consumer and Worker Protections

Law references: Multiple 2025 Washington employment and consumer protection bills
Effective dates: Phased in through 2026

Before
Washington had narrower definitions for qualifying leave uses and fewer procedural protections in some areas.

After
Expanded paid sick leave uses, fair chance hiring requirements, and protections for workers impacted by violence or hate crimes.

How this affects organizations
Hiring practices, leave policies, and documentation processes must be reviewed. Consistency and manager training are essential.

Learn more
Washington Department of Labor and Industries employment law updates: https://www.lni.wa.gov/workers-rights

Sales Tax Expansion on Services

Law reference: ESSB 5814
Effective date: October 1, 2025 with ongoing impact in 2026

Before
Many professional and digital services were not subject to Washington retail sales tax.

After
Sales tax now applies to services such as advertising, IT services, custom software, certain consulting services, and staffing services.

How this affects organizations
Businesses and nonprofits selling taxable services must collect and remit sales tax. Invoicing and accounting systems may need updates. Some nonprofits may lose assumed exemptions.

Learn more
Washington Department of Revenue taxable services guidance: https://dor.wa.gov/taxes-rates/retail-sales-tax/services-subject-sales-tax

Final Takeaways for 2026

2026 is less about sudden change and more about cumulative impact. Higher labor costs, expanded leave obligations, increased consumer protection scrutiny, and transportation funding uncertainty all affect how small businesses and nonprofits operate.

At the same time, we are navigating a period of broader uncertainty. We do not yet know what will occur with federal executive orders, immigration detentions, deportations, and other unnecessary and chaotic disruptions that may affect employees, clients, families, and entire communities.

What we do know is that clarity, preparation, and steady guidance matter more than ever. We will be here with you along the way to help make sense of these changes, interpret what applies to your organization, and navigate what comes next with care, context, and intention.