Overtime rules don't change for most.
Question: We are hearing lots of fanfare about changes in overtime rules that took effect on Aug. 23. Should we be doing something different in the way we calculate overtime for our hourly employees?
Answer: No. Almost all employees paid by the hour remain overtime-eligible and must receive time-and-one-half their regular hourly rate for all hours worked in excess of 40 in your designated seven-day workweek.
Question: So what exactly has changed?
Answer: The changes are in the federal regulations that dictate which employees may be classified as "exempt" from overtime.
The new federal "FairPay"overtime rules pertain to the `white collar exemptions' for certain executive, administrative and professional employees, and outside salespersons. The text of the new regulations, at 29 CFR Part 541, is available on the U.S. Department of Labor website at www.dol.gov/esa/regs/fedreg/final/2004009016.htm.
Oregon employers should keep in mind that the state statutes and regulations pertaining to white collar exemptions have not changed as of this date.
Question: Which law is my business required to follow: Oregon or federal?
Answer: Most employers in Oregon have "dual coverage," meaning that they are covered under the federal Fair Labor Standards Act of 1938, or FLSA, as well as the Oregon wage collection laws in ORS Chapter 652 and the Oregon minimum wage laws in ORS Chapter 653. When there is a conflict between federal and state laws, employers who are subject to both must apply the standard most beneficial to the employee.
For example, the current federal minimum wage is $5.15 per hour, but the 2004 Oregon minimum wage is $7.05 per hour. Oregon employers must follow the stricter state standard and pay the higher minimum wage.
The same concept applies to the rules on overtime and exempt classification.
For background information on overtime and exemptions, and a side-by-side comparison of state and federal rules, see the BOLI guidances at www.boli.state.or.us/new/overtimeinformation.pdf and www.boli.state.or.us/new/whitecollarexemption.pdf.
Question: How does the new federal law affect my business?
Answer: Unless and until the Oregon laws on classification of exempt employees change, the impact of the federal changes will be minimal for most Oregon employers, because in most respects the existing Oregon regulations are stricter than the new federal standards.
This means that generally, Oregon employees who were overtime-eligible before Aug. 23 remain overtime-eligible, and Oregon employees who were properly classified as exempt prior to Aug. 23 may still be classified as exempt.
The new federal regulations do set a stricter standard in one key respect. As of Aug. 23, the federal minimum salary that an exempt employee must receive increases to $455 per week, or $23,660 annually. Therefore, in order to maintain the exemption, Oregon employers must boost the salary of exempt employees to at least $455 per week for those employees whose salary was below that level.
Before Aug. 23, an exempt employee could earn as little as $155 per week under the federal regulations. Until August 23rd, the Oregon minimum salary of $282 had been the stricter standard for employers covered under both state and federal law. But as of Aug. 23, any employee earning less than $455 per week becomes overtime-eligible because of the new federal rules - even if he or she is paid on a salary basis.
On The Job is written by attorney Dan Grinfas of the Oregon Bureau of Labor and Industries. Contact BOLI at (503) 731-4200, or BOLI, 800 N.E. Oregon St. No. 32, Portland, OR 97232.
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|Publication:||The Register-Guard (Eugene, OR)|
|Date:||Sep 5, 2004|
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