Oregon Overtime Changes: How to Stay Compliant

Overtime law written on an office notebookJanuary 1, 2018 brought about big changes to Oregon’s overtime laws.

Bill 3458, which passed in the summer of 2017, went into effect at the start of 2018. The bill enacted several changes to the ways in which overtime must be calculated and paid to mill, factory and manufacturing workers.

Here, we break down some of the key elements of the new law. Employers who have questions about their own operations, however, should speak to a licensed Oregon attorney for specific advice.

Which employers are affected by the new overtime law?

The new law applies to most Oregon “manufacturing” companies. It defines “manufacturing” as the “process of using machinery to transform materials, substances or components into new products.” Generally speaking, “machinery” covers any equipment driven by a form of power that isn’t human power (such as hands, feet or breath).

The law does contain certain exceptions for sawmills, shingle mills, planing mills and logging camps.

Which employees are covered by the new law?

While the new law applies to employees of “manufacturing” companies, it does not apply to employees who do primarily administrative work “or who are not otherwise engaged in the direct processing of goods in the usual course of the employee’s duties.” Employees who spend more than 50 percent of their time supervising other workers are not covered by the law, even if they spend the remainder of that time participating in manufacturing.

Because many companies use employees whose duties change from day to day, employers will need to track what employees do and for how long to determine whether they engage in enough manufacturing work to be covered by the new law.

What do employers need to do differently when calculating overtime pay?

Before the law took effect, many manufacturing employers used “pyramiding” to calculate overtime pay to ensure workers got the overtime required by two separate Oregon statutes: one that required overtime for working more than 10 hours in a single day, and one that required overtime for working more than 40 hours in a single week.

Under the new law, when an employee has worked more than 40 hours in a workweek and has worked more than 10 hours in any day during that week, employers must calculate both the daily and weekly overtime, then pay the worker the larger of the two amounts.

The law also imposes new limitations on the maximum hours in a workweek, and it includes exemptions from these calculations for certain employers. It’s wise to speak to an attorney to understand how the calculations and exemptions might apply to your business.

How TERRA Can Help You

At TERRA Staffing Group, our recruiters stay on top of changes in Oregon’s hiring rules, workforce demographics and employment trends, so our clients always have a resource for the latest information.

To learn more about our recruitment services in Oregon and beyond, contact us today.

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