by Scott Herson-Hord, on Mar 22, 2022 11:15:00 AM
Since the enactment of the Fair Labor Standards Act (FLSA), Oregon employers are expected to pay their employees at an overtime rate for every hour of work done beyond the standard 40 hours per week. A workweek does not need to be from Monday to Friday, but can't be more than 40 hours long. Oregon's overtime payment rules also vary depending on the industry, the employee's position, and pay rate.
Overtime is one of the many types of Oregon Labor Laws employer must comply with. It's important for employers to understand not just Oregon overtime, but all of the state and federal labor laws and pay rules that are applicable, and put policies in place to ensure compliance across the board.
Oregon Overtime Overview
According to Oregon overtime law, eligible employees must be compensated at an overtime pay rate of 1.5x an employees regular pay rate for any time an employee worked over 40 hours in a standard work week.
However, this may not apply to all employees, as some employees may be categorized as ineligible, or "exempt" from overtime when looking at an employee's FLSA status to determine overtime eligibility.
It's also important to note that special overtime rules or provisions in Oregon may exist based on an employer's industry or business type.
Oregon Overtime Compensation & Pay
An hourly employee's overtime pay rate is simply the standard pay rate multiplied by 1.5x, or:
Standard Pay Rate multiplied by 1.5x = Overtime Pay Rate
When it comes to determining the standard pay rate of a salaried employee, the hourly pay rate must first be calculated using the following method:
Annual Salary divided by 52 weeks = Weekly Pay
Weekly Pay divided by 40 hours = Hourly Pay Rate
When calculating a salaried employee's hourly pay rate all forms of compensation must be included, except for the following:
- Expense reimbursements
- Premium pay for weekends and holidays
- Discretionary bonuses
- Gifts for special occasions
Oregon Overtime Eligibility
Oregon classifies whether or not employees are eligible for overtime based on exempt status.
Exempt employees, those that do NOT qualify for overtime are generally categorized as executive, administrative, or professional employees. Exempt employees are typically referred to as “white-collar” or “salaried exempt”.
Non-exempt employees are those that do qualify for overtime and are subject to minimum wage requirements.
Exempt employees in Oregon must meet requirements for one of the following duties tests and the salary test below. Not meeting the requirements would mean the employee is non-exempt.
Executive Duties Test
The following duties and responsibilities are those that are classified as exempt employees under the executive duties test:
- Primary duty must consist of:
- The management of the enterprise in which the employee is employed
- Generally means more than 50 percent of the work time is spent doing management tasks
- The employee is paid a significantly higher salary than non-exempt staff
- The employee makes frequent management decisions and the employee is free from direct supervision
- Supervising two or more full-time employees
- Have hiring or firing authority or, if not full authority, their recommendations are given particular weight
- Customarily and regularly exercise authority to make decisions of significance
Administrative Duties Test
The following duties and responsibilities are those that are classified as exempt employees under the administrative duties test:
- Primary duty must consist of one of the following:
- The performance of office or non-manual work directly related to management policies or general business operations of the employee’s employer or the employer’s customers
- Work must be distinguished from production or sales work and is limited to duties directly related to the running of a business and not merely carrying out day to day affairs
- The performance of functions in the administration of a school system, or educational establishment or institution, or of a department or subdivision thereof, in work directly related to the academic instruction or training
- The employee must customarily and regularly exercise authority to make decisions of significance
- The employee must perform work as such as an executive's assistant who has management duties; a staff employee, such as an advisory specialist or department head; or as a special assignment employee such as a human resources manager
Professional Duties Test
There are three types of professional categories, learned, creative, and teachers or tutors.
The following duties and responsibilities are those that are classified as exempt employees under the professional duties test:
- Primary duty must consist of:
- Learned professionals:
- Work requiring knowledge of an advanced type in a field of science
- Work requiring learning customarily acquired by a prolonged course of specialized intellectual instruction and study
- Creative professionals:
- Work that is original and creative in character
- Must be in a recognized field of artistic endeavor
- The work must primarily depend on the invention, imagination, or talent of the employee
- Teachers and tutors:
- Teaching, tutoring, instructing, or lecturing with the intent to educate
- Must be employed in a school or educational system or establishment
- Learned professionals:
- Work must require the consistent exercise of discretion and judgment in its performance
- Work must be predominantly intellectual and varied in character
- Work must be of such character that the result accomplished cannot be standardized on a basis of time
Outside of these duties tests, the employee must also pass the salary level test. This means that an employee must make at least $684 per week or $35,568 annually to be exempt from overtime.
Payment on a “salary basis” means that the agreed-upon amount is generally not subject to reduction based on the quality or quantity of work performed.
Overtime Exemption in Oregon for Undue Hardship
Oregon employers may be exempt from the standard maximum hours worked requirement, if their typical business manufactures perishable products.
In this instance, employers may allow employees to work up to 84 hours in a workweek for up to four weeks. After that, they may allow employees to work up to 80 hours for the remainder of the undue hardship period.
Employers may claim more than one undue hardship period in a year, but may not use more than 21 workweeks in a year.
Perishable products are defined as any product that may spoil, deteriorate or undergo other material changes that render it unsuitable for the use for which it was produced. This includes things such as crops, meat, and fish.
Oregon Overtime Provisions and Rules by Industry
Oregon overtime, for the most part, follows closely with the standards set by the FLSA. While employers should have a solid grasp and understanding of Oregon's general overtime provisions, it's important for employers to ensure whether or not there are industry-specific overtime laws that apply to the organization's employees.
Here are industries that have specific overtime rules or provisions in the Oregon:
- Seafood processors
- Some agricultural employers
- Correctional facility nursing staff
- Domestic workers
More detail on the overtime provisions for each of these industries can be found below.
Oregon Canneries Overtime
Special rules apply to employees who work overtime for Oregon canneries, driers, and packing plants that are not located on farms. However, these places of work must also primarily process products produced on farms.
Employers in this industry are required to be paid for any hours worked over 10 in a day or 40 hours in a workweek at one and one-half times the employee's regular rate of pay. Employers must also pay the greater amount of daily or weekly overtime earned.
While there is no daily limit for how many hours an employee may work in a day at one of these places of work, they may not work more than 55 hours in a week. There is an exception to this rule if the employee gives a written request or consent to work more than 55 hours. Even still an employee may not work for more than 60 hours in a workweek.
Oregon Seafood Processors Overtime
When it comes to Oregon seafood processors and overtime, the rules that apply are the same as Oregon canneries, with one exception.
Unless the facility in which seafood is processed meets the definition of a manufacturing establishment, then any non-exempt employees are entitled to the same hourly overtime requirements as Oregon canneries, with the exception of the maximum-hours-worked rule.
Oregon Manufacturing Overtime
Special rules apply to employees who work overtime in the Oregon manufacturing industry as well. All hours over 10 in a day, and 40 in a workweek are overtime hours, and must be compensated at one and a half times the employee’s regular rate of pay.
Employers must also pay employees the greater amount of overtime, whether it be the amount calculated on a daily or weekly basis.
In this industry, employees may not work for more than 13 hours in a single day. Employees are also entitled to receive a minimum of 10 hours of rest after any shift that lasts at least 8 hours.
Employees may not work more than 55 hours a week. There is an exception to this rule if the employee gives a written request or consent to work more than 55 hours. Even still an employee may not work for more than 60 hours in a workweek.
Oregon Agricultural Overtime
Oregon overtime defines agriculture as all types of farming and farm work and includes activities such as:
- Cultivating and tilling soil
- Producing, cultivating, growing, and harvesting crops
- Raising livestock
- Fur collection
- Poultry farming
- Preparing for market
- Delivering products to storage or market
If the agricultural work also falls under the definition of manufacturing, then manufacturing overtime rules would apply. And it's important to note that any canneries on a farm fall under agricultural overtime rules.
Oregon agricultural overtime applies to some agricultural employees. In fact, workers engaged in agricultural employment for 100 percent of the workweek are exempt from overtime.
Employees who handle products not grown by their employer or do not work within the definition of agriculture are due overtime after 40 hours in a workweek. Employees who process or handle any amount of another farmer’s crop is entitled to overtime as well.
Employees who are eligible for agricultural overtime must be compensated at one and a half times their regular rate of pay.
Oregon Correctional Facility Nursing Staff Overtime
Oregon also has overtime laws for correctional facility nurses.
Nurses in a correctional facility are not required to work overtime:
- Beyond the agreed, prearranged scheduled shift, regardless of the length
- More than 48 hours in a workweek
- More than 12 hours in any 24 hour period
Nurses must also be given, at minimum, a 10-hour break following any 12-hour shift.
There are some exceptions, however, where a nurse may work up to 4 additional hours, regardless of the previously stated rules. These exceptions include:
- A staff vacancy for the next shift becomes known at the end of the current shift
- There is a potential for harm to an assigned patient if the nursing staff member leaves the assignment or transfers care to another nursing staff member
There are also exceptions to overtime rules if the reason for overtime is an emergency. Emergency circumstances can include:
- Severe weather conditions
- An infectious disease epidemic suffered by correctional facility staff
- Any unforeseen event, including security lockdown procedures, that prevent the scheduled replacement from entering the facility
- If the correctional facility determines that the nursing staff scheduled and available for the next shift cannot ensure the health and safety of the patients at the facility
Oregon Overtime for Domestic Workers
According to the Domestic Workers' Protection Act, domestic workers are covered by the same overtime regulations as any other employee in the state of Oregon, with one exception.
For domestic workers who also live in the employer's home, overtime does not begin accumulating until the employee works in excess of 44 hours in a workweek.
A Final Thought for Oregon Employers
As mentioned, there are many other aspects of Oregon labor laws that employers should also be familiar with, such as break and rest periods, Oregon sick leave laws, child labor laws, Oregon OSHA, and much more. It is also recommended that employers consider a labor law subscription service for simple, hands-off compliance.
Partnering with an Oregon-based HR and payroll provider is also a great way to start ensuring overtime compliance with your company.
Visit GNSA to learn about how a great time and labor management solution helps businesses throughout the state stay compliant with federal and state overtime laws.
Guest Author: Scott Herson-Hord
Scott Herson-Hord is the CEO of Great Northern Staff Administrators (GNSA), an Oregon payroll services company that specializes in serving small to mid-size businesses with administrative solutions to streamline back-office processes from benefits to human resources. Starting his career in finance and working more than 10 years as a controller for various companies, Scott leveraged this experience over the next 22 years with GNSA to become one of the pacific northwest’s foremost experts in human capital management (HCM).