Oregon Overtime Pay for Salary Employees

By: Joel Christiansen

Hourly employees in Oregon are almost always entitled to overtime for all hours worked in excess of 40 per workweek. However, many Oregon employees do not understand that salary pay alone does not disqualify them from receiving overtime. Employees paid on a salary basis who do not perform specific "exempt duties" are often eligible to receive up to two years of back overtime pay (up to three years of overtime for willful violations). Employees may also be able to recover DOUBLE the amount of their unpaid overtime under federal law plus additional penalties under Oregon state law. The Oregon Bureau of Labor and Industries (BOLI) does not enforce federal law and therefore does not collect double/liquidated damages for employees. 

Employers frequently conflate the concepts of "salary pay" and "exempt from overtime." Employees, many of whom are not savvy to wage and hour law, lose tons of money over time as a result of these employer mistakes. For example, if a non-exempt employee earned $45,000 per year and worked just 5 hours of overtime per week, that employee's overtime, liquidated damages, and penalty claims over two years could add up to just under $35,000.00. This number may be significantly for higher-paid employees, those working longer hours, and groups of similarly-situated employees who are subject to uniform employer policies that result in systematic nonpayment of overtime.

In deciding whether an employee is legally entitled to receive overtime pay, courts look to determine whether an employee fits under specific "exempt" categories as spelled out in detail by Oregon and federal law. See, e.g. ORS 653.020, 29 U.S.C. ยง 213. The employer bears the burden to prove exempt status. Exempt status often, but not always, requires salary pay plus exempt duties. Exempt duties typically require that an employee perform some kind of higher-level executive, technical, or administrative work. Certain outside sales and commission pay employees may also be exempt from overtime. An employee's primary job duty must also include the exercise of discretion and independent judgment with respect to matters of significance. This means that lower level employees and production employees are usually entitled to overtime, regardless of whether they are paid a salary or hourly wages.

Next, even if an employee's duties fit into an exempt category, courts will still need to consider whether an employer strictly adhered to the "salary test." If an employer does not pass the salary test, they must pay overtime to the employee(s) in question. There are many things that can cause an employer to fail the salary test. For example, if an employer regularly deducts from an employee's salary for short periods of missed work or pays an employee on an hourly basis, the employee in question may have a viable overtime claim.

To reiterate, salary pay alone does not disqualify Oregon employees from receiving overtime. But overtime laws are also complicated. If you have concerns about a specific situation, it is best to call an employment attorney. A good lawyer will help you determine your exact legal rights regarding overtime pay and work with you to develop a game plan to enforce your rights.