Overtime Laws in Oregon: Everything You Need to Know

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Not everyone has time to go to law school – even when the law in question affects business owners across the country. We’re talking about overtime here, and knowing the ins and outs of your state’s laws can save you a major headache (not to mention potential legal trouble). So the experts here at actiTIME have done the research and gathered all you need to know about overtime in Oregon.

Overtime laws in Oregon

What Are the Overtime Laws in Oregon?

Each state can choose to apply their own laws or fall back on the Fair Labor Standards Act (FLSA) that was passed nationally in 1938. Most states have a mixture of the two, and Oregon has only added a few light changes to national overtime laws. If you need a refresher on how overtime works, feel free to read our primer on how it affects your employees and your business.

Defining a position’s workweek is one of the first things you need to do before calculating overtime. Oregon defines a workweek as a period of seven consecutive 24-hour days that don’t necessarily line up with calendar weeks. Therefore, a company’s workweek can start on Tuesday and end on Monday, for example. Or different jobs within one office (programmers and designers, say) can start their workweeks on different days. The main thing is consistency – once a position has a defined workweek, it cannot change.

The FLSA states that all workers are entitled to overtime pay for every hour worked over forty hours in a given workweek. If an employee works less hours one week after working many hours, you can’t just even them out:

Yes
Week 1:
43 hours
Week 2:
37 hours
Total:
77 regular hours
+ 3 overtime hours
No
Week 1:
43 hours
Week 2:
37 hours
Total:
80 regular hours

Oregon doesn’t have a limit on the amount of hours worked in one day – this is in contrast to many states that count any hours worked over 8 in a workday as overtime hours.

In Oregon, employers can compensate for overtime in two ways:

  • Pay: at 1.5x the regular rate of pay;
  • Time off: each overtime hour is counted as 1.5 paid hours off.

Compensatory time can’t be banked once 240 hours have been reached.

How Do I Calculate Overtime Pay in Oregon?

While this might seem overwhelming for employers trying to understand the nuances of overtime law, calculating overtime rates aren’t hard.

In Oregon, as of July 1st 2020, the minimum wage is $13.25 an hour for the Portland metro region ($19.88 overtime) and $12 in the rest of the state ($18 overtime). A weekly pay stub for a Portland worker might look like this:

Week 1:
Week 2:
Week 3:
Week 4:
Regular hours:
Overtime hours:
Total:
36 hours (36 regular)
42 hours (40 regular + 2 overtime)
29 hours (29 regular)
46 hours (40 regular + 6 overtime)
145 x $13.25 = $1921.25
8 x $19.88 = $159.04
$2080.29

After getting used to the system, making sure that all employees are paid out properly for overtime is simple. There are a couple factors to keep in mind while calculating, though.

Commission is the first major factor. For workers who deal with sales, commission often makes up a large part of their take-home pay. This means that employers have to add weekly commission rates to a worker’s base rate of pay in order to get a more accurate overtime rate.

While this might sound complicated, it’s simple in practice. All you have to do is take the commissions worked in a week, add it to the worker’s earnings at the regular pay rate and then divide it by the hours worked. For example, such a calculation (for retail workers earning minimum wage in Portland) might look like this:

Week 1:
Regular pay:
40 hours x $13.25 ($530) + commission ($350) = $880
$880 / 40 = $22

In a week where overtime hours were accumulated, the calculation might look like this:

Week 2:
Regular pay:
Overtime pay:
Total regular hours:
Total overtime hours:
Total:
45 hours x $13.25 ($596.25) + commission ($250) = $846.25
$846.25 / 45 = $18.81
$18.81 x 1.5 = $28.22
40 x $18.81 = $752.40
5 x $28.22 = $141.10
$893.50

After commission, the next most important factor for calculating overtime pay is an employee’s bonus. Not all bonuses count towards a worker’s base rate of pay, and so you need to do a little more research into the question. That said, generally speaking, non-discretionary bonuses are often included. To get your worker’s regular rate of pay, add up all the money they’ve earned at their base rate during the relevant bonus period and add the amount to their bonus. Then divide that amount by the hours they’ve worked and now you have your worker’s regular pay rate.

If someone gets a $1000 monthly bonus while working 160 hours in a minimum wage position, this would be their regular pay rate:

160 hours x $13.25 = $2120 

Regular hours: ($2120) + bonus ($1000) = $3120
Regular rate: $3120 / 160 = $19.50
Overtime rate: $19.50 x 1.5 = $29.25

Now that you have your employee’s regular pay rate, you can calculate their monthly overtime rate:

Week 1:
Week 2:
Week 3:
Week 4:
Total pay:
36 hours (36 x $19.50) = $702
47 hours (40 x $ 19.50 [$780] + 7 x $29.25 [$204.75]) = $984.75
40 hours (40 x $19.50) = $780
37 hours (37 x $19.50) = $721.50
$3188.25

Who Is and Isn’t Qualified for Overtime Pay in Oregon?

The FLSA was written in a time when there was public concern over the exploitation of manual laborers, and so national overtime laws were not written to cover every type of employee.

One of two conditions have to be met for workers to qualify for overtime payment rates:

At least one of the must be fulfilled:

  • Their earnings in a week have to be less than $455 ($23,660 yearly);
  • Their job cannot appear on the exemption list (below).

According to the FLSA, manual laborers (construction & factory workers, warehouse stockers, cashiers, etc) are automatically entitled to overtime pay. Also included are nurses, paralegal workers and first responders like firefighters, police officers and paramedics.

There are a few positions marked out by the FLSA as automatically disqualified from overtime pay when the weekly salary in question is under $455:

Executives (who manage more than two people full-time);
Administrative workers;
Non-manual professional workers (artists, teachers, programmers);
External salespeople;
Independent contractors;
Certain transportation and agricultural workers;
Certain live-in employees.

Oregon also includes a few additional jobs:

  • Fishers;
  • Commission-based workers;
  • Computer industry workers who earn more than $27.63 an hour;
  • Truck drivers (and their helpers) who work interstate routes;
  • Certain other transportation workers covered by Part I of the Interstate Commerce Act or Title II of the Railway Labor Act;
  • Certain workers who fall under guaranteed annual wage plans reached through collective bargaining;
  • Most agricultural employees;
  • Golf caddies.

For any additional questions, consult the FLSA and labor laws in the state.

Track Overtime Using actiTIME!

Oregon overtime laws differ from those in other states across the country, and keeping on top of the regulations leads to happy workers and less headaches overall.

And actiTIME is here to empower you to make the right payments, every time! Read about our products and other resources to find out more about what we can do for you.

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