Between December 2016 and January 2017, the Oregon Bureau of Labor and Industries (BOLI) instituted a significant change in its historic treatment of the interplay between two statutes that provide for daily and weekly overtime pay.

The first statute, ORS 653.261, is the basis for BOLI regulations requiring employers to provide overtime pay of one-and-a-half times the regular hourly rate of pay to nonexempt employees for hours worked over forty (40) in a workweek. 

The second statute, ORS 652.020, regulates the daily maximum hours for employees in a “mill, factory or manufacturing establishment,” and requires that employers provide overtime pay of one-and-a-half times the regular hourly rate of pay to employees for hours worked over 10 in a given day (or 8 hours for some timber-related activities).  BOLI defines “manufacturing establishment” as any place where machinery is used for “manufacturing purposes,” which includes the process of making goods or any material produced by machinery.   

Under BOLI’s historic interpretation of the interaction of these two statutes, “when employees who are entitled to daily overtime have worked more than 40 hours in the workweek and have also exceeded the maximum number of hours on one or more days, thereby earning daily overtime, the employer should calculate overtime hours worked on both the daily and weekly bases and pay the greater amount.” 

BOLI’s Wage and Hour Division’s new interpretation requires covered employers to provide overtime pay under both statutes fully and separately because, according to BOLI, “[t]he two statutes enact distinct overtime requirements and serve different purposes with respect to restrictions on hours worked by employees.”  Therefore, a manufacturing employee who works both daily and weekly overtime in a given work week would be paid both overtime amounts.  BOLI has updated its Field Operations Manual and online guidance to reflect its new interpretation.  BOLI’s online Technical Assistance for Employers provides the following example:

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 work week wages = $1,095.00

Employees who perform work under a valid collective bargaining agreement are exempt from the application of this new overtime interpretation as are some employees with specific duties at mills, factories, and manufacturing establishments, such as supervisors, guards, and those primarily providing transportation to other employees.   

Employer-backed organizations will likely attempt to introduce legislation in 2017 to require BOLI to return to its historic treatment of these overtime requirements.  In the meantime, however, employers impacted by the daily overtime statute should be careful to appropriately apply the new overtime standards to avoid the risk of overtime wage claims.