Oregon Wage Law Explained
The Oregon Labor Laws address many issues relating to the relationship between employer and employee, including the rules for the payment of wages, overtime pay, final wages, the rules for authorized and unauthorized payroll deductions, and recordkeeping requirements.
Our overtime rights lawyers represent Oregon employees who have been subjected to workplace wage and hour violations and take cases on a contingent fee basis – no fee if no recovery of backpay. If you believe you’ve been deprived of the compensation to which you’re legally entitled, please contact the Lore Law Firm.
Oregon Wage and Overtime laws
While Oregon does have certain state labor laws that differ from the federal Fair Labor Standards Act (FLSA), including those on minimum wage and overtime pay, the state law applies only in instances where it provides greater rights or protections than federal law. Whichever law (state or federal) is more favorable to the worker will apply.
What’s in This Article
a table of contents
The Oregon minimum wage is subject to a cost-of-living adjustment based on the Consumer Price Index starting July 1, 2023.
|Date||Standard||Portland Metro||Nonurban Counties|
|July 1, 2018||$10.75||$12.00||$10.50|
|July 1, 2019||$11.25||$12.50||$11.00|
|July 1, 2020||$12.00||$13.25||$11.50|
|July 1, 2021||$12.75||$14.00||$12.00|
|July 1, 2022||$13.50||$14.75||$12.50|
|July 1, 2023||*See Below for more info.||$1.25 over the standard min wage||$1 less than the standard min wage|
*adjusted annually based on the increase, if any, to the US City average Consumer Price Index for All Urban Consumers
State law prohibits using tips to calculate the amount of Oregon’s minimum wage. This means that all employers in Oregon must pay the full amount of minimum wage without the benefit of a tip credit.
Oregon state labor laws regarding the payment of overtime are mostly consistent with the federal overtime laws. As most employers are covered by the FLSA, generally the FLSA will apply and requires employers to pay time and a-half for all hours worked over 40 per workweek, unless an employee is properly classified as exempt, or Oregon state wage laws provide a greater benefit or right to the worker.
Which Employees are Entitled to Overtime Pay
Most workers in Oregon are entitled to overtime pay when they work more than 40 hours per week. In certain circumstances, however, there are exemptions.
Employees engaged in executive, administrative, or professional capacities (and paid at least $455 per week on a salary basis) are exempt from the overtime requirement. Note that new minimum salary requirements for these overtime exemptions take effect in January 2020 and increase the minimum salary threshold to $684 per week (or $35,568 annually). This change in federal law will also apply to most workers in Oregon when making the determination of whether they are classified as exempt or non-exempt from the overtime pay laws.
Manufacturing Employees overtime pay rules changed effective January 1, 2018. Oregon overtime law now requires most employers in the manufacturing sector to pay employees working in mills, factories and other plants the greater of daily or weekly overtime if an employee works more than 10 hours in a single day and more than 40 hours total in the course of a single workweek. The law also sets a weekly work limit for most manufacturing employees of 55 hours (exception for those who process perishable goods).
Employees who are exempt from Oregon state overtime regulations, but not from the minimum wage law, include: Salespersons, parts persons, and mechanics in automotive or farm machinery dealerships; Most truck drivers or drivers’ helpers; Seamen; Some agricultural workers; and Motion picture theater workers.
Hospitals and nursing homes may elect to pay overtime for work over 8 hours per day and 80 hours per two-week period.
Domestic workers residing in the home of the employer are due overtime pay for hours worked over 44 per week.
Are You Owed Back Overtime Wages?
Misclassification of Independent Contractors
Misclassification occurs when a business treats its workers as independent contractors (or subcontractors) rather than employees to avoid legal obligations such as social security taxes, worker’s compensation, unemployment insurance and overtime pay.
While there are situations in which workers are legitimately running their own business and properly treated as independent contractors who are not entitled to receive overtime, employers are not allowed to mischaracterize employee roles to avoid paying overtime compensation.
Merely labeling a worker as an independent contractor, or even entering into a written agreement, is not enough to avoid the labor laws on overtime pay.
There are several factors to be considered in determining if a worker in Oregon is an employee or independent contractor (a/k/a 1099 employee)
If properly classified as an independent contractor under Oregon law, workers are typically eligible for only the specific compensation bargained for in a contract.
In general, an employer doesn’t violate overtime laws by requiring employees to work overtime, (ie “mandatory overtime”), as long as they are properly compensated at the premium rate required by law. However, most manufacturing employers may not require employees to work more than 55 hours in a workweek (unless they process perishable goods).
In general, deductions from wages are lawful only for the following:
- Deductions required by law such as taxes or garnishments.
- Deductions that are for the employee´s benefit such as health insurance premiums. The employee must sign a written authorization and the deductions must be recorded in the employer´s books and records.
- Other deductions authorized by the employee in writing as long as the employer is not the ultimate recipient of the money, such as charitable contributions.
- Deductions authorized by a collective bargaining agreement to which the employer is a party.
Employers MAY made deductions for the fair market value of meals or lodging provided for the private benefit of the employee. If the employee does not want the meals, no deductions may be made.
Employers MAY NOT make deductions for the cost of breakage or loss.
Additionally, employers MAY NOT make deductions from employees’ earnings the minimum wage for uniforms or tools or their maintenance.
Regular paydays must be established and maintained by every employer. Payment to new employees must be made no later than 35 days from the time their work was begun. Pay periods may be established more frequently, but may not exceed 35 days.
When an employer has notice that an employee has not been paid the full amount the employee is owed on a regular payday and there is no dispute between the employer and the employee regarding the amount of the unpaid wages, if the unpaid amount is five percent or more of the employee’s gross wages due on the regular payday, the employer must pay the employee the unpaid amount within three days after the employer has notice of the unpaid amount, excluding Saturdays, Sundays and holidays.
When an employee is fired, all wages earned by that person are due no later than the end of the first business day after discharge.
If an employee quits with at least 48 hours of notice, wages are due the last working day (excluding Saturdays, Sundays and holidays). If an employee quits without 48 hours of notice, wages are due in five days (excluding Saturdays, Sundays and holidays) or on the next payday, whichever occurs first.
Final paychecks may not be held pending return of a uniform or tool or for any other similar reason.
Pay Stubs / Pay Statements
Oregon labor laws require an employer provide an itemized statement of deductions made from wages to employees on their regular paydays at the time payment is made. The statement must show the amount and purpose of each deduction. It may be a part of the paycheck, attached to it, or may be a separate document. If the employee agrees, the statement may be provided in an electronic format, provided the employee has the ability to print or store the statement.
Meal and Rest Breaks
The Oregon Wage and Hour Laws require meal periods of not less than 30 minutes must be provided to non-exempt adult employees who work six or more hours in one work period. For further details, see this page.
Paid rest periods of at least 10 minutes must be provided during each four-hour work period or major part thereof. The rest period is to be taken approximately in the middle of each work segment. There are narrow exemptions to the rest period requirements for part-time adult employees working alone in retail/service businesses. Rest periods may not be added to the meal period or deducted from the beginning or end of the work period in order to reduce the length of the work period. Rest periods may not be waived or used to adjust working hours.
The federal Fair Labor Standards Act does not require that an employer give employees any mandatory rest breaks or meal breaks.
Oregon law requires all employers with 10 or more employees in Oregon (or at least 6 for employers located in Portland) to provide up to 40 hours of paid sick leave per year. Employers with less than 10 employees (less than 6 for employers located in Portland) must provide up to 40 hours of unpaid protected sick time.
Generally, employees accrue 1 hour of sick time for every 30 hours worked or 1-1/3 hours for every 40 hours worked, and are eligible to take accrued sick time after 90 days of employment.
It is unlawful for an employer to take retaliatory personnel action for exercising rights or attempting to exercise rights under Oregon’s sick time law.
Statute of limitations
Under Oregon’s wage and labor law, employers are liable for unpaid wages for a period of 6 years from the date the wages were earned. For claims of unpaid overtime, the recovery period is 2 years.
The deadline for filing an overtime claim under the federal FLSA, requires those seeking to recover unpaid back overtime wages file a lawsuit within two years from the date of the employer’s wage violation. So, a lawsuit filed today would be able to seek recovery of back overtime for only the prior 2 (sometimes 3) years.
As an example, suppose you believe that your employer has failed to pay you proper overtime wages since January 1, 2016. Waiting until June 1, 2019, to file your lawsuit means you are only allowed to seek unpaid wages from June 1, 2017, to June 1, 2019.
The statute of limitations may be extended to three years if an employer’s violation of the FLSA was willful. An FLSA violation is deemed willful if the employer knew that its conduct was prohibited by the FLSA or showed reckless disregard.
Penalties for Violations
Oregon wage payment law provides that any employer who willfully withholds any portion of an employee’s final wages may be subject to a penalty of the employee’s hourly rate for eight hours per day for each day the employee remains unpaid up to a maximum of 30 days. The penalty may not exceed 100% of the unpaid wages if the employer pays the wages due within twelve days after written notice of nonpayment is sent to the employer and the employer has not willfully violated the final pay provisions of the law in the preceding year.
Under federal law, employers who fail to pay proper overtime wages may be liable for up to double the amount of unpaid back wages plus costs and attorney’s fees incurred by employees. These cases can be brought by overtime pay lawyers on a class or collective basis on behalf of all workers who were subjected to the same illegal pay practices.
Layoffs, Plant Closings and WARN Notices
The Worker Adjustment and Retraining Notification Act (WARN) offers protection to Oregon workers, their families and communities by requiring employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs. This notice must be provided to either affected workers or their representatives (e.g., a labor union).
An employer who violates the WARN Act by failing to provide appropriate notice is liable to each employee for an amount up to 60 days back pay and benefits for the period of violation.
Lore Law Firm is On your side
At the Lore Law Firm, we represent salaried, hourly, and day-rate workers in an array of employment litigation matters, including unpaid overtime compensation claims in Oregon. Our attorneys, and the Oregon overtime law attorneys we associate with, are passionate about protecting the rights of workers and have helped recover millions of dollars in unpaid overtime wages for our clients.
Contact us for a free and confidential review of your situation