Employers have a duty to pay their employees fairly for any extra hours they work.
According to Oregon Labor Laws, if an employee works more than 40 hours in a week, they are entitled to receive overtime pay at one and a half times their regular rate of pay.
This article will provide information to successfully navigate Oregon’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.
This article covers:
- Oregon Overtime Rates
- Overtime Entitlement in Oregon
- Unauthorized Overtime in Oregon
- Overtime for Tipped Employees in Oregon
- Overtime for Salaried Employees in Oregon
- Calculating Overtime with Commission in Oregon
- Overtime Exceptions and Exemptions in Oregon
- Statute of Limitations For Unpaid Overtime Claims in Oregon
- Penalties for Not Providing Overtime Pay to Employees in Oregon
- Legal Cases Relating to Overtime Compensation in Oregon
Oregon regulates overtime based on the federal Fair Labor Standards Act (FLSA). For any hours worked beyond a total of 40 in one work week, or 10 in a work day, the majority of hourly employees in Oregon have the right to an overtime pay rate.
Overtime in Oregon is set at 1.5 times the regular hourly rate. Since the regular Oregon minimum wage is $14.20 per hour, this makes Oregon overtime minimum wage $21.30 per hour.
According to Oregon overtime laws, overtime pay is required for any non-exempt employees.
Employees who earn below $684 a week ($35,568 per year) and work in a non-exempt industry are entitled to overtime pay.
However, an employee’s overall eligibility for overtime pay will be based on what the job duties are as well as what type of business they are in.
Read more about Overtime Exceptions and Exemptions in Oregon.
If an employee works unauthorized overtime, an employer is still obligated to provide overtime compensation. However, an employer can take disciplinary action against that employee for violating the workplace policy without permission.
A tipped employee in Oregon is entitled to overtime compensation. However, the minimum wage for tipped employees in Oregon equals the regular minimum wage i.e $14.20.
In Oregon, some salaried employees are entitled to overtime pay. A salaried employee is someone who receives a set amount of pay regardless of how many hours they work.
To determine a salaried employee’s overtime rate, an employer must first determine their employee’s hourly rate which can be calculated using the following method:
Annual Salary divided by 52 weeks = Weekly Pay
Weekly Pay divided by 40 hours = Hourly Pay Rate
Then, take the hourly pay rate to calculate the overtime rate for salaried employees using the following formula:
Hourly pay rate x Overtime Hours x Overtime Rate (1.5)
It is important to note that if an employee’s salary covers less than 40 hours in a workweek, their regular rate will be added for every subsequent hour working up to the 40. Only after 40 hours will time-and-a-half be counted.
If an employee’s salary covers 40 hours in a workweek, then time-and-a-half will be paid for any hours over 40.
Employees in Oregon who receive commissions are eligible for overtime at a rate of 1.5 times their regular hourly rate. Their regular hourly rate must include the commissions earned as well. However, they will only be given half of that rate for every overtime hour.
For example, let’s say an employee works 45 hours a week at a rate of $14.20/hour (Oregon minimum wage) and receives $50 in commissions for that week. We need first to calculate the new regular hourly rate:
(Total hours x Hourly Rate) + Commission
= (45 x 14.20) + 50
Then, divide that by the total hours worked in the week.
= $689 / 45
=$15.31 (new regular hourly rate)
To determine the overtime rate for the commissioned employees, we need to take that new regular hourly rate and halve it.
$15.31 / 2
Since the employee worked an extra 5 hours in the week, that makes his overtime compensation $38.30 ($7.66 x 5 hours).
The amount will vary according to the hours worked, hourly rate, and commission earned.
Here you can find the exceptions and exemptions for overtime in Oregon:
- Administration, executives, professionals, and outside sales who earn at least $684/week
- Some agricultural workers
- Workers engaged in the range production of livestock
- Domestic workers in family homes, employed on a casual basis
- Students enrolled in primary and secondary education institutions employed by the same institution
- Operators of taxicabs
- Workers living at the place of employment who must be available for emergency duties
- Workers paid for specified hours, to be available for duty
- Managers, assistant managers, and maintenance workers employed and lodged in multi-unit accommodations
- Seasonal workers at educational camps — provided they earn less than $500,000 per year
- Seasonal workers at nonprofit camps
- Workers employed at nonprofit conference areas for educational, religious, and charitable purposes
- Volunteer firefighters
- Companions to elderly, disabled, or infirm people in their family homes
- Resident managers of adult foster care homes
- Inmate labor workers
- Referees of youth and adult recreational soccer matches
- Certain ski patrollers, golf course caddies, and marshals
- Workers of independently owned and operated local enterprises engaged in the wholesale or bulk distribution of petroleum products
- Workers in pursuance of an agreement made as a result of collective bargaining
- Workers residing on the premises of hospitals or other establishments primarily engaged in the care of “the sick, the aged, or the mentally ill and defective”
- Workers of nonprofit amusement or recreational park provided the establishment doesn’t operate more than 7 months per year
- Workers involved in the fishing and processing of aquatic animal and vegetable life
- Computer system analysts, programmers, software developers, and similarly skilled workers — provided their hourly rate is at least $27.63
According to Oregon overtime laws, employers can be held liable for any unpaid overtime wages for 2 years from the date on which the wages were earned.
However, for willful overtime violations by an employer, the statute of limitations can increase to 3 years.
In Oregon, if an employer does not provide overtime pay to their non-exempt employees, they can face civil penalties equal to 8 hours of the wage for each day the employer is late to pay the overtime wages.
It is important to note that the Oregon overtime civil penalty is limited to 30 days.
For example, if an employee earns a rate of $13.20 per hour (Oregon minimum wage), the maximum amount of overtime civil penalty they may receive is $3,168 ($13.20 x 8 x 30).
Below, we present law cases relating to fair overtime compensation for employees in Oregon:
1. Construction Site Employee Claims to Receive Only Partial Payment From Employer
In the case of Cortes v. Calderon, Federico Cortes filed a lawsuit against Armando Calderon Vazques and Jose Calderon who were conducting business as Tactical Builders and Design, LLC (Tactical B&D). Cortes claimed that he worked for Tactical B&D’s construction sites to remodel homes. The lawsuit alleged that Tactical B&D violated the Fair Labor Standards Act (FLSA) and the Oregon state laws that governed minimum wage and overtime pay.
According to Cortes, he was promised a daily wage of $100 for 8 hours of work but was only paid partially sometimes or not at all. Cortes also claimed that he was not paid for any overtime hours worked. Tactical B&D had not responded to this lawsuit which made Cortes motion for a default judgment in his favor.
In moving for a default judgment, Cortes had requested a settlement of $13,138 for his back wages and civil penalties for Tactical B&D’s failure to provide minimum and overtime wages.
After taking into consideration certain factors, the court recommends that a default judgment be granted against Tactical B&D. Cortes was awarded the amount he had requested as it aligned with FLSA which included unpaid wages and liquidated damages.
Key lessons from this case:
- Not responding to a lawsuit could end up with a default judgment in favor of the party who filed the lawsuit.
- If an employee wins a lawsuit about overtime back wages, the calculation for the settlement amount will consist of the back wages owed and liquidated damages.
- The court may accept well-pleaded allegations in a lawsuit as true when granting a default judgment, except for the amount for damages, which must be proven.
2. Employer Provides Untimely Payment of Overtime Wages to Employee
In the case of Merritt v. Cascade Corporation, Jory Merritt filed a lawsuit against his former employer, Cascade Corporation (Cascade), for untimely payment of overtime wages. This was a violation of the Fair Labor Standards Act (FLSA).
The FLSA establishes that overtime wages need to be paid on an employee’s regular payday. However, Cascade did not pay overtime wages to their employees until the payday of the following pay period. Cascade argued that the reason for doing so was because there was not enough time to calculate and include overtime pay on the same paycheck.
Cascade had filed a motion to dismiss this case. However, the court affirmed that there were many questions regarding whether Cascade’s overtime pay calculations and practice comply with the FLSA. Therefore, the court denied Cascade’s motion to dismiss the case because Merritt had made plausible allegations that required further investigations.
The final ruling is undetermined.
Key lessons from this case:
- Overtime compensation must be included in the paycheck that employees receive and should not be delayed until the next paycheck.
- Employers must have a proper system in place to accurately calculate overtime wages.
- Having strong allegations against an employer can ensure that the court decides to further investigate a case instead of dismissing it.
3. Employee Still Entitled to Overtime Compensation Despite Being Promoted to Manager
In the case of Walker v. B & B Print Source, Inc., Arthur Wayne Walker filed a lawsuit against his former employer, B & B Print Source (B & B) for failure to pay him overtime compensation and timely wages upon termination.
Walker started working for B & B as a bindery operator and was later promoted to bindery manager. He was paid on an hourly basis initially but was switched to a salary due to his promotion. B & B argued that Walker’s primary duty was management, which made him exempt from overtime pay under the Fair Labor Standards Act (FLSA). B & B filed for a summary judgment in its favor.
The court considered factors such as the importance of exempt duties compared to non-exempt duties and the amount of time spent on each type of duty. The court concluded that Walker’s main value to the company was his experience and skills in operating bindery machinery, rather than his performance as a manager. The court also determined that Walker’s job duties remained the same despite his promotion to manager.
Ultimately, B & B’s motion for summary judgment was denied by the court.
Key lessons from this case:
- Employees in Oregon who are paid on a salary basis may still be entitled to overtime pay if their primary duty is not exempt from overtime.
- Employees who are promoted to a management position may not automatically be exempt from overtime pay.
- A court will consider an employee’s job responsibilities instead of just looking at their job title.
Learn more about Oregon Labor Laws through our detailed guide.
Important Cautionary Note
When making this article we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you seek advice from qualified professionals before acting on any information provided in this article. We do not accept any liability for any damages or risks incurred for use of this article.