From the Desk of John Kreutzer: As of July 1, 2016, Oregon no longer has a standard minimum wage across counties. Now there are three wage areas: Metro, Standard and Nonurban. Wages increased by 25 cents in rural counties, from $9.25 to $9.50, and 50 cents in major cities, from $9.25 to $9.75. Here is what employers need to know about this historic change:
1. Areas: In the Portland metro area, defined as the land within Metro’s Urban Growth Boundary, the minimum wage rises to $9.75-an-hour. For the Standard area, places such as Eugene-Springfield, Medford, Corvallis, the Northern Coast and Bend, the rate will also rise to $9.75-an-hour. In the rest of the state, some 18 counties defined as Nonurban area including all of Eastern Oregon, the minimum wage will increase to $9.50-an-hour.
2. Wages: The minimum wage in Oregon will continue to rise on a set schedule.
3. Exceptions: The minimum wage applies to almost all workers in the state, as there are currently no sub-minimum rates for trainees or minors. Workers not subject to the minimum wage laws include: some agricultural workers; in-home child care providers; in-home, but casual, domestic workers; exempt employees; outside salespersons; taxicab operators; on-site for safety employees. For the full list click the link at the bottom of the page, or call with questions about your employees’ eligibility.
4. Hours Included: Employers must receive minimum wage for ALL hours worked, this includes preparation time, opening and closing times, and all required meetings. Also, most Oregon employees are entitled to be paid for 10 minute rest breaks during each four-hour work period.
5. Record Keeping: Any time spent by an employee in the performance of duties must be recorded as work time. Regardless of how wages are paid (i.e. salary, piece-rate, commission) employers must keep accurate time records, failure to do so can result in liability in wage and hour litigation.
6. Tip Credit: Oregon does not allow for the deduction of tips from the minimum wage, all employers must pay all employees the full amount of the minimum wage without benefit of the tip credit. This is highly contentious and may change.
7. Overtime: Non-exempt employees are entitled to one and one-half times the employee’s regular rate of pay for any hour worked over 40 in a work week. Compensatory time off (comp time) is not allowed for private employers. Check our recent FLSA Update on who is and isn’t exempt in Oregon.
8. Working in 2 Areas: Employees who cross area boundaries for work (i.e. truck drivers) are paid the rate of the area they do the majority of their work in. So, if an employee works in Portland 51% of the time, then the Portland rate applies for all hours worked in both areas.
9. Reduction in Hours: Oregon is at at-will state. Employers are free to make decisions about hours and schedules as they deem necessary for their business. Therefore, employers can reduce the hours of their employees without facing any liability so long as it is not for discriminatory or retaliatory purposes.
10. What’s next?: On July 1, 2017, the largest wage jump of any year in the six-year cycle will increase Metro workers to $11.25-an-hour, a 13 percent increase. Rural workers will be paid $10-an-hour, and workers in Eugene and elsewhere will see $10.25-an-hour wages. Employers are encouraged to start planning now for this increase.
Employer Pointer: Moving forward, employers should review their payroll practices and, as with any minimum wage increase, implement any required changes to comply with each of the upcoming rate adjustments.
View Bureau of Labor and Industries Fact Sheet at: https://www.oregon.gov/boli/WHD/docs/statelawswages_english.pdf
Employment updates are intended to inform our clients and others about legal matters of current interest. They are not intended as legal advice. Readers should not act upon the information contained in this article without seeking professional counsel.