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Overtime: Oregon

Overtime requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: Sean Ray, Barran Liebman LLP

Updating Author: XpertHR Editorial Team

Summary

  • Oregon's overtime compensation requirements are similar to federal law, with limited exceptions. Most nonexempt employees must be paid at least one and one-half times their regular rate of pay for all hours worked in excess of 40 hours in a workweek. See Basic Overtime Requirements.
  • Employees working in manufacturing and certain other industries also are owed overtime when they work more than 10 hours in a day. See Daily Overtime Requirements.
  • Certain forms of remuneration may be excluded from the regular rate of pay when calculating overtime. See The Regular Rate.
  • Oregon law allows for the fluctuating workweek method of calculating overtime compensation for employees who are paid an agreed-upon fixed amount per week even though their hours may change week to week. See The Fluctuating Workweek.
  • Oregon law allows public employers to compensate employees for overtime with compensatory time off instead of monetary payment. See Compensatory Time.
  • Certain employees may be paid overtime based on alternatives to the standard 40-hours-per-week threshold. See Alternative Work Periods.

Basic Overtime Requirements

Nonexempt employees must be paid at least one and one-half times their regular rate of pay for all hours worked in excess of 40 hours in a workweek. +Or. Admin. R. 839-020-0030.

Daily Overtime Requirements

Oregon also has a daily overtime requirement for employees employed by:

  • Manufacturing establishments (including mills and factories (see +OAR 839-001-0100)) where machinery is used to transform materials, substances or components into new products; and
  • Canneries, driers or packing plants (except those located on farms and primarily processing products produced on such farms).

Nonexempt employees in these industries must be paid one and one-half times their regular rate of pay for both:

  • Hours worked in excess of 10 per day; and
  • Hours worked in excess of 40 hours per workweek.

If, during a workweek, a covered employee works more than 10 hours in a day and more than 40 hours in the workweek, the employer pays the greater of the daily overtime due or of the weekly overtime due, not both on top of each other.

+Or. Rev. Stat. § 652.020 and +Or. Rev. Stat. § 653.265, as amended by +2017 Bill Text OR H.B. 3458.

Practical Example 1

Day Hours Regular Daily
Overtime
Weekly
Overtime
Monday 12 10 2 0
Tuesday 8 8 0 0
Wednesday 5 5 0 0
Thursday 5 5 0 0
Friday 11 10 1 1
Total 41 38 3 1

Employee's regular rate of pay is $12.00 per hour.

41 hours worked x $12.00= $492.00

3 hours daily overtime x $6.00 = $18.00

1 hour weekly overtime x $6.00 = $6.00

Total pay = $510.00 (base pay of $492.00 plus the greater of daily or weekly overtime ($18.00))

Practical Example 2

Day Hours Regular Daily
Overtime
Weekly
Overtime
Monday 13 10 3 0
Tuesday 13 10 3 0
Wednesday 10 10 0 0
Thursday 12 4 2 8
Friday 11 0 1 11
Total 59 34 9 19

Employee's regular rate of pay is $15.00 per hour.

59 hours x $15.00 = $885.00

9 hours daily overtime x $7.50 = $67.50

19 hours weekly overtime x $7.50 = $142.50

Total pay = $1,027.50 (base pay of $885.00 plus the greater of daily or weekly overtime ($142.50))

Employees employed in manufacturing establishments also may not work more than 13 hours in any given day or, effective January 1, 2018, more than 55 hours in a workweek absent an employee waiver or undue hardship exemption.

Daily Overtime Exemptions

The following employees are exempt from both the 10-hours-per-day overtime requirement and the 13-hours-per-day limit:

  • Supervisors, managers and forepersons who supervise and direct work (including those who are temporarily acting in these capacities in the absence of the named employees);
  • Employees who are party to a collective bargaining agreement (CBA) as long as:
    • The CBA is in effect at the employee's work site;
    • The CBA contains a provision that limits the employee's required hours of work; and
    • The CBA contains a provision for the payment of overtime hours of work.
  • Members of a logging train crew;
  • Watchpersons;
  • Firepersons whose primary duty is to operate and clean boilers or to maintain fuel and steam pressure levels in those boilers;
  • Employees who have a regular duty of transporting other employees to and from work;
  • Employees whose primary duty is to make necessary repairs, including conducting maintenance on buildings, equipment or machinery;
  • Employees engaged in emergency work, meaning a situation that threatens to harm or destroy life or property (as opposed to routine operational occurrences when the normal production process is interrupted by a breakdown of machinery or unexpected employee absences);
  • Employees whose primary duty is cleaning, guarding, repairing and otherwise caring for the living quarters and immediate surrounding areas of other employees;
  • Employees whose primary duty is feeding, grooming, guarding or otherwise caring for livestock;
  • Employees whose primary duty is to work in messhalls where meals are served to other employees;
  • Employees whose primary duty is the loading, removal and shipping of forest products ready for sale to a wholesaler or retailer of finished products (but not of products shipped for further processing at another location);
  • Employees of sawmills, planing mills, shingle mills and logging camps (as defined under +OAR 839-001-0127) until similar laws have been enacted in California, Washington and Idaho (+Or. Rev. Stat. § 652.030).

+OAR 839-001-0125.

These exemptions are determined by the type of work the individual performs and the location of the work performed in any one day, so an employee's exemption status may vary from day to day. Employees qualify for an exemption only when they are engaged in exempt work more than 50 percent of their working time in any one day. +OAR 839-001-0130.

The Regular Rate

An employee's regular rate of pay is the regularly hourly rate the employer agrees to pay the employee for work performed. Absent an express agreement dictating the regular rate, the regular rate is calculated by dividing the total amount paid to the employee in a single workweek (minus the benefits discussed below) divided by the total number of hours worked in that workweek. However, an employee's regular rate of pay may not fall below the statutory minimum wage.

Compensation That May Be Excluded

Certain forms of remuneration may be excluded when calculating the regular rate of pay, including:

  • Commissions;
  • Discretionary bonuses;
  • Tips;
  • Gifts;
  • Profit sharing; and
  • Holiday or vacation pay.

+Or. Admin. R. 839-020-0030.

Although Oregon's forthcoming predictive scheduling law states that the regular rate of pay does not include "any additional compensation an employer is required to pay an employee under section 6 or 7 of this 2017 Act," this definition applies only to the provisions enacted by the predictive scheduling law, not Section 653 of the Oregon Revised Statutes in its entirety, according to an email to XpertHR from the Oregon Bureau of Labor and Industries. As a result, schedule-change premiums and compensation for work performed during minimum times between shifts must be included in the regular rate of pay when calculating how much overtime an employee is owed.

Exceptions to the Regular Rate Principle

Oregon specifically permits employers to enter into agreements for guaranteed compensation instead of overtime under a "Belo plan," as federal law allows. +Or. Admin. R. 839-020-0125(c); see Employee Compensation > Overtime > Exceptions to the Regular Rate Principle.

Defining the Workweek

A workweek means a fixed period of time established by an employer that reflects a regularly recurring period of 168 hours or seven consecutive 24-hour periods. A workweek may begin on any day of the week and any hour of the day and need not coincide with a calendar week. The beginning of the workweek may be changed if the change is intended to be permanent and is not designed to evade Oregon's overtime requirements. For purposes of overtime computation, each workweek stands alone. +Or. Rev. Stat. § 652.020(1)(b), +Or. Admin. R. 839-020-0030(2)(a).

Computing Overtime

Computing overtime payments for Oregon employees is the same as under federal law. For employees compensated on an hourly basis, employers should multiply the employee's hourly rate by 1.5 for every hour worked over 40 in a workweek. For salaried employees, the regular rate must first be calculated before calculating the amount of overtime owed. To compute the regular rate for a salaried employee, employers should divide the weekly salary by the number of hours the salary is intended to compensate. +Or. Admin. R. 839-020-0030(3).

The Fluctuating Workweek

Oregon law allows for the fluctuating workweek method of calculating overtime compensation for employees who are paid an agreed upon fixed amount per week even though their hours may change week to week. +Or. Admin. R. 839-020-0030(3)(f). For a detailed description of the fluctuating workweek method and for practical examples, see Employee Compensation > Overtime > The Fluctuating Workweek.

Compensatory Time

Public employers that do not have funds budgeted to pay nonexempt employees overtime wages may provide compensatory time instead of overtime wages. In such situations, employees who work more than 40 hours in a workweek must receive compensatory time at a rate of one and one-half hours for each hour over 40 worked. +Or. Rev. Stat. § 653.268(1). Certain employees are exempt from these requirements, including hospital workers and firefighters. +Or. Rev. Stat. § 653.269.

The federal caps on compensatory time apply in Oregon. After 240 compensatory hours have been accrued (representing 160 hours worked), additional overtime must be paid. The limits for firefighters, police, and emergency response personnel are higher, as they have a 480-hour limit. Additionally, compensatory time must be "cashed out" in accord with federal law. See Employee Compensation > Overtime > Compensatory Time.

Alternative Work Periods

Certain employees may be paid overtime based on alternatives to the standard 40-hours-per-week threshold, as follows.

1040/2080 Plans for Unionized Employees

Oregon's rules allow for the same 1040/2080 overtime plans for unionized employees as provided in the FLSA. That is, employers must pay overtime to unionized employees who work more than 1,040 hours in a 26-week period or more than 2,080 hours in a 52-week period. +Or. Admin. R. 839-020-0125(2)(a); see Employee Compensation > Overtime > Alternative Work Periods.

Eight and 80 Overtime

Oregon's rules allow for the same Eight and 80 method of calculating overtime for hospital, nursing home, and other residential care facility employees as provided in the FLSA. That is, such facilities must pay overtime to such employees who work more than eight hours in a single day or who work more than 80 hours in a continuous 14-day work period. +Or. Admin. R. 839-020-0125(2)(e); see Employee Compensation > Overtime > Alternative Work Periods.

Firefighters

Firefighters employed by a fire department with three or fewer full-time firefighters employed may not be required to work more than 72 hours per week on regular duty. Firefighters employed by a fire department with four or more full-time firefighters employed may not be required to work more than 56 hours per week on regular duty. Additionally, firefighters must be provided at least 48 consecutive hours of off-duty time during each seven-day period. Fire departments that fail to follow these rules must pay regularly employed firefighters overtime at one and one-half times their hourly rate for every hour of regular duty above the maximum statutory amount (which varies depending on the number of employed firefighters as mentioned above). However, firefighters employed at fire departments with four or more full-time firefighters may elect to work more than the statutory amount (56 hours per week) as a replacement for authorized leave, vacation, or a temporary vacancy. When computing overtime for firefighters, time used for authorized vacation or sick leave will count as time on regular duty. +Or. Rev. Stat. § 652.060; +Or. Rev. Stat. § 652.070; +Or. Rev. Stat. § 652.080.

Communications in Postings Required by Oregon Law

Oregon requires a poster relating to overtime and other requirements. There is a separate poster for agricultural employers. +ORS § 653.050.

Future Developments

There are no developments to report at this time. Continue to check XpertHR regularly for the latest information on this and other topics.