Summary: The Oregon Bureau of Labor and Industries announced a significant reinterpretation of the interplay between the state’s daily and weekly overtime laws. According to BOLI, manufacturing employers must fully and separately provide overtime pay under both statutes instead of paying the greater of the two amounts.
Coverage: Manufacturing employers with employees working in Oregon.
Effective: Immediate.
Action Required: Manufacturing employers should review the guidance and their overtime calculation practices to determine if changes are necessary. If changes are necessary, employers should immediately notify their Payroll Service Representative.
The Oregon Bureau of Labor and Industries (BOLI) has issued new guidance on rules governing daily and weekly overtime calculations for mills, factories, and manufacturing establishments.
Background
In Oregon, employers must pay non-exempt employees overtime pay in the amount of one-and-a-half times the regular rate of pay for each hour worked over 40 hours in a workweek. Manufacturing employers are also required to pay employees who work in a mill, factory or manufacturing establishment one-and-one-half times the regular hourly rate for hours worked over 10 (or 8 hours for timber related activities) in a given day.
A “manufacturing establishment” is any place where machinery is used for “manufacturing purposes,” which includes:
• The process of making goods or any material produced by machinery;
• Anything made from raw materials by machinery; and
• The production of articles for use from raw or prepared materials by giving such materials new forms, qualities, properties or combinations, by the use of machinery.
New Guidance
Historically, when an employee worked both daily and weekly overtime, employers were instructed to “calculate overtime hours worked on both the daily and weekly bases and pay the greater amount.” Recently, BOLI announced a new interpretation of the same laws. According to BOLI, “[t]he two statutes enact distinct overtime requirements and serve different purposes with respect to restrictions on hours worked by employees.” As a result, employers must calculate overtime on both a daily and weekly basis and pay employees both amounts.
For example, an employee whose workweek is Sunday through Saturday works the following hours during the week:
|
Day
|
Hours Worked
|
Total Daily Overtime Hours
|
|
Monday
|
12
|
2
|
|
Tuesday
|
8
|
0
|
|
Wednesday
|
5
|
0
|
|
Thursday
|
5
|
0
|
|
Friday
|
11
|
1
|
|
TOTALS
|
41
|
Daily Overtime: 3
Weekly Overtime: 1
|
At a pay rate of $12.00 per hour, the employee is entitled to the following wages:
41 hours worked x $12 .00= $492.00
3 hours daily overtime x $6.00 = $18.00
1 hour weekly overtime x $6.00 = $6.00
Total work week wages = $516.00
BOLI has updated its Field Operations Manual and online guidance, Technical Assistance for Employers, to reflect its new interpretation.
Exemptions
Employees who perform work under a valid collective bargaining agreement are exempt from the application of the new overtime interpretation. Some employees with specific duties at mills, factories, and manufacturing establishments, such as supervisors, guards, and those primarily providing transportation to other employees may also be exempt from the new overtime interpretation.
Next Steps
Manufacturing employers who are impacted by both the daily and weekly overtime provisions should review the guidance and their overtime calculation practices to determine if changes are necessary. If changes are necessary, employers should immediately notify their Payroll Service Representative.