State further clarifies Minimum Wage rules. You may be effected.

Barran Liebman
Oregon Law Firm

By Damien T. Munsinger

Oregon will become the first state in the nation with a tiered minimum wage on July 1, when a different minimum wage will apply in three different regions across the state:

The “employer’s location” determines which rate will apply. BOLI recently released proposed rules defining the “employer’s location” to mean where the employee performs work and that may complicate employers’ efforts to determine which minimum wage applies to which workers, and when.

Specifically, BOLI’s proposed rules define the “employer’s location” to mean any place where an employer employs any employee for more than an “incidental period of time” during the employee’s workweek, with “incidental period of time” defined as less than four hours of compensable time during any workweek as well as time spent by an employee in a region solely for the purpose of travelling through the region from a point outside the region to another point outside the region with no work-related stops. The proposed rules explain that an employer has more than one location if it has employees performing work in multiple regions during the same pay period.

Accordingly, if an employee works more than four hours in more than one region in any workweek, the employer must pay the employee the applicable minimum wage for each hour worked in each region. For example, if, in a workweek, an employee works 32 hours in Salem but works 8 hours in Portland, the employer must pay the higher Portland minimum wage rate for the 8 hours worked in Portland but may pay the base rate for the 32 hours worked in Salem.

The proposed rules also impose a recordkeeping requirement on the employer to track the location of hours worked each workday for each individual employee so it can be determined which minimum wage rate should apply. Employers are relieved of this recordkeeping requirement if they pay the employee the highest minimum wage for the region in which the employee worked for all hours worked in the workweek. So, in the above example, if the employer pays the employee at the Portland minimum wage rate for all hours worked, it need not keep records of which hours the employee worked in which location.

We encourage you to submit comments to BOLI about how the proposed rules will impact your operations. BOLI will be accepting comments on the draft rules until Monday, May 23, 2016, at 5:00 p.m. The proposed rules are available online (look for the bold text), and comments can be emailed to BOLI at [email protected].
As the July 1 effective date for Oregon’s unique minimum wage system approaches, employers should review and revise their policies and practices to make sure they will be in compliance.

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