By Matthew Diment
Oregon has seen a few labor law changes over the last year that may very likely impact your business. These changes include increases to minimum wage, changes in the interpretation of overtime rules, and a rescission of the tip pooling restrictions. Make sure you understand the new rules and update your policies accordingly.
The 2016 Oregon legislature enacted Senate Bill 1532 which sets a graduated scale for minimum wage increases through July 2022. The standard minimum wage increased to $10.25 per hour on July 1 of this year and is scheduled to increase to $10.75 next July 1. If you pay minimum wage or if your wage scale is tied to minimum wage increases, you should be aware of these scheduled increases.
The Oregon Bureau of Labor and Industries'(BOLI) interpretation of the overtime rules for manufacturers has recently been in flux. There are two sets of rules covering overtime. One states that overtime is required if an employee works over 10 hours in a day. The other covers overtime for more than 40 hours worked in a week. This was interpreted to mean that an employee could earn overtime on the same hours twice. For example, if an employee worked 12 hours on Monday and 10 hours for the next three days totaling 42 hours for the week, they would earn overtime on two hours for the daily limit and another two for the weekly limit, essentially doubling up their overtime. For years, the BOLI position was that if an employer paid the daily overtime it was entitled to offset the weekly overtime. In December of 2016, BOLI changed its interpretation to mean the employer could no longer offset overtime obligations but was responsible for paying both daily and weekly overtime rates. The Multnomah Circuit Court ruled in March of 2017 that employers were not responsible for both, but should pay the higher of the two. House Bill 3458, similar to the ruling of the Multnomah Circuit Court, passed the Oregon Senate in July 2017. The bill has been concurred by the House of Representatives and now goes to the governor for her signature.
Tip pooling is the practice of sharing tipped employees’ tips with untipped employees. The current U.S. Department of Labor (USDOL) rules state that businesses cannot require employees to share tips. The 9th Circuit Court ruled that this applied even if the employers were not taking a tip credit (the practice of employers utilizing a limited amount of the employees’ tips as a credit against their minimum wage obligations by using tips as wages) and were paying at least minimum wage to employees. The USDOL has now proposed a full rescission of these restrictions which will specifically impact employers who are paying minimum wage or higher to their employees. Although current law has not yet changed, it will be important to keep a close eye on this in the near future.