Background on the Final Rule and Details of the Change:
Employees performing production work in mills, factories, and manufacturing establishments must be paid 1.5 times their regular rate of pay for all hours worked over 10 in any workday (employees may not work more than 13 hours in any given day.) The same employees must ALSO receive 1.5 times their regular rate of pay for hours worked over 40 in a workweek. This requires daily and weekly overtime thresholds to be calculated separately from one another on the same underlying time. It will in some cases lead to overtime being paid twice on the same time. Employees in most other occupations do not receive daily overtime.
General Impact to Employers:
Affected employees will need a separate overtime configuration that calculates overtime according to the above requirements. Unlike most existing overtime configurations, this requires daily and weekly overtime to be calculated completely independently of one another, meaning weekly overtime configurations should not exclude pay codes or categories associated with daily overtime. Earnings statements will need to include correct overtime amounts and time and pay classifications. Employers will need to determine if they have employees who are subject to this requirement. There are a few exceptions that clients should review with their compliance advisors.
Legislation has been introduced in Oregon’s state legislature to invalidate this requirement, but it is pending at this time, and several lawsuits are currently working their way through Oregon courts. There is a waiver process from this requirement for Oregon employers, should they want to exempt themselves from this requirement.
For more information, please reference BOLI’s website to obtain more information and a waiver application. You can also visit the following websites for more details: