In a surprising move, the Oregon Bureau of Labor and Industries (BOLI) is now taking the position that manufacturing employers should pay both daily and weekly overtime if earned in the same workweek, not merely the greater of the two amounts. Sometime in December 2016, BOLI quietly changed both its Field Operations Manual for enforcement and its Technical Assistance FAQs on Daily Overtime for Manufacturing Employers regarding the overlap of the daily overtime and the weekly overtime rules for manufacturers in Oregon. Previously BOLI Technical Assistance’s long-standing advice had been to pay employees the greater of the daily or weekly overtime amount.
Here’s how the calculation works. Suppose a laborer in a manufacturing plant works four 12-hour days plus an 8-hour day in one workweek. That’s a total of 56 hours in the workweek. To calculate the number of weekly overtime hours, subtract 40 and you get 16 weekly overtime hours. To calculate the number of daily overtime hours, tally up the number of hours worked beyond 10 in each workday and you get 8 hours of daily overtime (2 hours per day times 4 days). Under the old interpretation, you would compare the weekly overtime hours (16) to the daily overtime hours (8) and pay the greater of the two amounts. Now BOLI is saying you would combine those two numbers to get 24 hours that should be paid at the overtime rate.
BOLI has claimed that this is not a change in position, but rather a correction of erroneous advice given by its Technical Assistance division. This issue has been brought to light in response to a pending class action overtime lawsuit brought by the Northwest Workers Justice Project against Portland Specialty Baking, as reported by the Northwest Labor Press. BOLI believes its new interpretation is correct because the two overtime standards come from two separate statutes. One Oregon statute (ORS 653.261) allows the agency to require employers to pay overtime to non-exempt employees for hours worked over 40 in a workweek, while another statute (ORS 652.020) requires that most manufacturing establishments pay their employees overtime for hours worked over 10 in a workday.
Tips: There are many exceptions to Oregon’s daily overtime rules for manufacturers, so before you start worrying about the agency’s new position, determine whether an exception may apply. The daily overtime rules don’t apply to sawmills, planing mills, shingle mills and logging camps. They also don’t apply to union-represented workers, as long as their collective bargaining agreement limits the required hours of work and addresses overtime payments. Certain individual positions are also excluded from the daily overtime requirements, such as maintenance and boiler operator jobs.
This change in policy has come about rather suddenly with no formal notice. The outcome of the pending litigation could impact the agency’s position moving forward and we may still see changes in the form of new legislation or administrative rules. While we wait for the dust to settle, the most conservative approach will be for covered employers to pay overtime based on both the daily rate and the weekly rate. Employers can also review work schedules to try to avoid situations where both types of overtime are earned in a workweek. Talk to your Vigilant employment attorney to evaluate your options.