BY AMY ROBINSON & CAROLYN PEARSON
Just last week, Governor Kate Brown signed an amendment to Oregon’s Minimum Wage Act into law. The new law will increase Oregon’s minimum wage over the next several years. The initial minimum wage increase will begin on July 1, 2016, and gradually increase each July 1 until June 30, 2023. Beginning July 1, 2023, the minimum wage will be a rate adjusted for inflation as calculated by the Commissioner of the Bureau of Labor and Industries (“BOLI”).
There are three applicable minimum wage schedules that may apply, depending on the location of the employer:
- For employers located within the Portland Metro Service District (i.e., Clackamas, Multnomah, and Washington Counties):
- July 1, 2016 to June 30, 2017: $9.75;
- July 1, 2017 to June 30, 2018: $11.25;
- July 1, 2018 to June 30, 2019: $12.00;
- July 1, 2019 to June 30, 2020: $12.50;
- July 1, 2020 to June 30, 2021: $13.25;
- July 1, 2021 to June 30, 2022: $14.00; and
- July 1, 2022 to June 30, 2023: $14.75.
Beginning on July 1, 2023, the rate for employees employed within this area will be $1.25 per hour higher than the general minimum wage set by BOLI.
- For employers located outside the Portland Metropolitan Service District, but not in one of the defined “nonurban” counties defined below:
- July 1, 2016 to June 30, 2017: $9.75;
- July 1, 2017 to June 30, 2018: $10.25;
- July 1, 2018 to June 30, 2019: $10.75;
- July 1, 2019 to June 30, 2020: $11.25;
- July 1, 2020 to June 30, 2021: $12.00;
- July 1, 2021 to June 30, 2022: $12.75; and
- July 1, 2022 to June 30, 2023: $13.50.
- For employers located in “nonurban counties” (expressly defined to include: Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa, and Wheeler):
- July 1, 2016 to June 30, 2017: $9.50;
- July 1, 2017 to June 30, 2018: $10.00;
- July 1, 2018 to June 30, 2019: $10.50;
- July 1, 2019 to June 30, 2020: $11.00;
- July 1, 2020 to June 30, 2021: $11.50;
- July 1, 2021 to June 30, 2022: $12.00; and
- July 1, 2022 to June 30, 2023: $12.50.
Beginning July 1, 2023, the minimum wage for nonurban counties will be $1.00 per hour lower than the general minimum wage set by BOLI.
This amendment did not alter the minimum wage exemptions offered to certain industries, such as certain agricultural employees, piece rate workers, and domestic workers. However, given the increased amounts of the applicable minimum wage, it is more important than ever to make sure an employee truly meets an applicable exemption, or the employer may risk having to pay not only unpaid wages, but also potential penalties and attorneys’ fees if they have been proven later to have gotten it wrong.
Finally, the law does not expressly define how the employer’s location will be determined but does impose an obligation on BOLI to adopt rules for making that determination. Presumably, those rules could have a significant impact here, particularly on employers who operate in one or more of these areas. We will, of course, plan to update you when the rules are published.
So, what do employers need to do now?Recall that the current minimum wage in Oregon is $9.25 as of January 1, 2016. However, this new law went into effect immediately on March 2, 2016, when it was signed, and the new rates are now officially set. Given that, we strongly recommend that employers begin to look at their payroll and make the appropriate budgetary adjustments to ensure they are prepared to pay the increased minimum wage on July 1, 2016.
In the meantime, employers with operations in more than one of these defined areas should be on the lookout for BOLI’s rules to determine an employer’s location to ensure they are fully in compliance with the new law.
As always, we plan to keep you apprised of developments that might be of interest to you. Call us 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.