State of Oregon workers represented by Service Employees International Union (SEIU) Local 503 and the American Federation of State, County and Municipal Employees (AFSCME) ratified new contracts with 6.5% raises over the next two years. The new contracts also add a step on top of the existing 10-step wage schedules and give workers a financial boost to weather a payment system change that will come in 2027.
SEIU Local 503’s contract was approved with 86% support in a vote that ran through Oct. 3. AFSCME’s state worker locals approved their contracts with an average 96% approval Aug. 30.
Local 503 represents around 26,000 workers at state agencies, including roughly 7,000 in the Oregon Department of Transportation and 10,000 in human services agencies. AFSCME represents approximately 3,500 state workers in locals that bargain key components of their contracts together. AFSCME also represents corrections workers under a separate contract.
The contracts provide a 2.5% raise Feb. 1, 2026, and 4% on Jan. 1, 2027.
State employees are currently paid once a month based on estimated hours, which results in under- and over-payments. The state wanted to switch to paying workers every two weeks based on actual hours worked, but SEIU Local 503 union bargaining chair Angela Ward said many workers were uncomfortable with switching the system after growing accustomed to managing their finances with a first-of-the-month paycheck.
Before that switch takes place in July 2027, workers will get an extra $1,700 and 40 hours of paid time off, which can be used or cashed out.
The state and unions will also form a committee to oversee implementation of the new system.
The state’s last big payroll change was a fiasco. In early 2023, after the state moved payroll to Workday, thousands of workers received paychecks that were too low, too high, or delayed. Under a settlement approved in May, the state agreed to pay $15 million to workers who experienced paycheck issues during the payroll transition.
The raises in the new SEIU and AFSCME contracts are just half of what workers got in the last contract, but they’re higher than most prior years — and higher than what many SEIU members expected in the current economy, Ward said.
“State workers fell behind pretty hard in the recession, and these last couple contracts have given us an opportunity to catch back up,” Ward said.
Ward said the 11th step on the salary schedule was added to help workers who have worked for the state for many years.
“Last contract, we were focused on bringing up the bottom, trying to get people a living wage,” Ward said. “We were really successful with that… but what that does is it creates some compression in the middle.”
Workers who have worked for the state for 10 years and have topped out on the salary schedule will move up to the new top step in early 2027.
