By Cal Keith
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Much of a new law affecting overtime pay in mills, factories, and manufacturing facilities in Oregon will take effect on January 1.
In most circumstances, employers in Oregon must pay overtime wages after an employee has worked 40 hours in a week, but mills, factories, and manufacturing facilities also face a daily overtime requirement after 10 hours. In December 2016, the Oregon Bureau of Labor and Industries (BOLI) changed its long-established interpretation of overtime rules for mills, factories, and manufacturing facilities to require employers to sometimes pay more overtime than under the previous interpretation.
A state judge soon barred the new interpretation, and then the legislature passed House Bill 3458, which clarifies that a manufacturing employer must pay only the greater of daily overtime or weekly overtime. The portion reversing BOLI’s interpretation became effective immediately, but other aspects of the bill will take effect on January 1.
The law defines “manufacturing facility” to say that manufacturing is the use of machinery to transform materials, substances, or components into new products. Machinery can include material-handling equipment and power-driven machines powered by anything other than human hand, foot, or breath.
Also, the new law limits the number of mandatory work hours in a manufacturing facility to 55 hours in one week. Employees may consent in writing to work up to an additional five hours in a week.
The law provides an exception to those rules for “undue hardship,” which refers to the period during which a perishable product must be processed after harvesting, slaughter, or catch. During that time, employees may work up to 84 hours per week for four weeks and up to 80 hours per workweek for the remainder of the hardship period. There is a detailed process for declaring an undue hardship, and employers may declare no more than 21 weeks of undue hardship per year.
Employees in a sawmill may not be required to work more than eight hours in a day or 48 hours in a workweek. They may work an additional three hours each day with overtime pay up to the 48-hour maximum.
For more information on the new law, see the August issue of Oregon Employment Law Letter.
Cal Keith is an attorney with Perkins Coie LLP in Portland, Oregon. He can be reached at ckeith@perkinscoie.com.