As we alerted you earlier this year, Oregon adopted significant changes to the Minimum Wage Act that go into effect JULY 1, 2016. Just under the wire, the Oregon Bureau of Labor and Industries (“BOLI”) rolled out new rules related to implementation of those changes last week. In particular, the rules define how “employer location” will be determined now that the minimum wage rate differs among 3 defined geographic regions in Oregon. Here are the key takeaways:
- For purposes of determining the applicable region and minimum wage rate, the employer’s “permanent fixed location” in Oregon will govern if the employee performs at least 50% of the work for that pay period at that location.
- If an employee makes deliveries as part of their duties, the “permanent fixed location” of the employer will still govern the appropriate region/minimum wage rate if the employee begins and ends their regular work days at that same location. For example, a delivery driver who reports to work at the main office/distribution center in Gresham and makes deliveries to Pendleton and back during the same work day along the I-84 corridor would be required to make no less than the applicable minimum wage in effect for Gresham. For this year (July 1, 2016- July 1, 2017) that means $9.75 per hour.
- When more than 50% of an employee’s compensable time for a pay period is in a location other than the “permanent fixed location”, the “employer location” for purposes of determining minimum wage rate is the region in which the majority of work is performed. For example, if the employer’s corporate office is in Portland but has employees who perform the majority of their work from a branch office in Enterprise, Oregon, then the employees must be paid at least the applicable minimum wage in effect for the region covering Enterprise, which until July 1, 2017 will be $9.50 per hour.
- If none of the above apply and the employee works in more than one region in a single pay period, they must be paid either:
- At least the minimum wage for each hour in each region where the work is performed, and the employer must keep records to reflect where the work was performed; or
- The highest wage rate required in any region where work was performed by the employee for all hours worked in that pay period. If the employer chooses this option, they will be excused from having to keep records of where the work was actually performed.
- If employees perform work in more than one region in a pay period, the employer is required to maintain records of all locations worked unless they meet the limited exception outlined above.
Again, remember that this change to the minimum wage rate did not alter the exemptions offered to certain industries and types of work, such as the exemptions available to certain agricultural employees, piece rate workers, and domestic workers. However, given the increase to the minimum wage amount, it is more important than ever to make sure an employee truly meets an applicable exemption, or the employer may risk having to pay both the increased amount of unpaid wages, but also potential penalties and attorneys’ fees if they have been proven later to have gotten it wrong.
So, what should employers do now?
Again, these rules go into effect JULY 1, 2016. Make sure your pay practices are in line by that date, and ask for help from a qualified professional in advance if needed. At a minimum, be sure to:
- Prepare to pay the (new) appropriate minimum wage. If, based upon the rules outlined above, you are paying more than one hourly rate within a single pay period, make sure that the applicable rates are accurately reflected on the paystub. For example, if you have a minimum wage employee who worked 26 hours in Umatilla County and 14 hours in Clackamas County, the paystub should reflect 26 hours at $9.50 per hour, and 14 hours at $9.75 per hour. In the alternative, you can pay the entire 40 hours at $9.75, the higher rate. We recommend employers take the time to evaluate these options and make that decision now, so that payroll personnel have appropriate instructions in time to implement the decision and there is uniformity and consistency going forward.
- Keep records of where the work is performed. This is mandatory if you have employees working in more than one of the defined regions in a single pay period, unless you intend to pay the highest rate for all time worked. Even if you do not, we recommend you consider doing so as a best practice to be able to demonstrate compliance in the event of a challenge or audit.
There is no mandated method for such tracking, so there may be several possibilities that make sense to your particular operation, including: adding a “location” column/field to the timesheet, outlining the location (by city/county) on the published schedule, and/or creating separate location tracking reports/databases for employees to submit. We typically recommend a method that includes an acknowledgment/certification by the employee that the information is accurate and complete.
- Make sure the current Minimum Wage Rate Posters are posted and up-to-date. BOLI has published versions that are available online here: https://www.oregon.gov/boli/WHD/pages/minimum_wage_posters.aspx
As always, we will keep you apprised of developments that we think may be of interest. In the meantime, do not hesitate to call if you have questions or concerns about minimum wage laws or specific exemptions, payroll reporting obligations, need your current wage-related polices or handbook reviewed and/or revised, or have any other issues you need assistance with. We will be more than happy to help.
This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations. For more information on this topic, please contact firstname.lastname@example.org or call (888) 598-7070.