Under two new wage laws, Oregon employers will have to comply with three separate minimum wages as of July 1, 2016, depending on the employer’s location, and then will have to provide all employees with additional information about how that pay was calculated, effective January 1, 2017. Oregon's Bureau of Labor and Industries (BOLI) recently announced its intent to propose rules that will hopefully remove the confusion about which of the three new state minimum wages, initially ranging from $9.50 to $9.75, applies to which employee, many of whom work and travel between all three minimum wage districts. Once employers are told how to calculate the appropriate minimum wage, they will have to provide all employees with additional information on their pay under legislation waiting for the governor’s signature.
New Information About the Minimum Wage Increase Is Coming Soon
Under the recent minimum wage legislation, wage increases begin July 1, 2016, and hourly rates will increase each year thereafter. The hourly rate an employee receives is determined based on the employer's location, but because the legislation left it to the Commissioner of BOLI to develop rules regarding determining where an employer is located, some employers were left wondering what they would be required to pay. According to BOLI, that is about to change.
On March 16, 2016, BOLI announced its intent to hold a proposed rulemaking hearing regarding implementing rules to "define employer location for the three geographic regions of minimum wage." BOLI has not posted its proposed rules yet, but they will be posted at: http://www.oregon.gov/boli/. BOLI will accept public comments on the proposed rules through April 29, 2016. (Additional information about how to submit comments is available at BOLI's website.)
Once an Employer Knows Where It Is Located, How Much Will It Pay?
The minimum wage increases will be implemented in three tiers based on location. Once an employer identifies where it is "located," it should prepare to adjust its hourly wages accordingly. The increases for all tiers will occur incrementally over the next eight years.
- "Urban" Minimum Wage Rates: Oregon employers located within the "urban growth boundary of a metropolitan service district organized under ORS chapter 268" will pay the highest wage rates over the next eight years. Minimum wages in those areas will increase to $9.75 per hour on July 1, 2016, and then increase by amounts ranging from $.50 to $1.50 per year, to reach $14.75 in 2022. Yearly increases in following years will be no less than $1.25 more than the minimum wage rate adjusted for inflation.
- "Nonurban" Minimum Wage Rates: Oregon employers located in a "nonurban county" (Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa, and Wheeler) will pay the lowest wage rates over the next eight years. Minimum wages in those counties will increase to $9.50 per hour on July 1, 2016, and increase by $0.50 per year, to reach $12.50 per hour in 2022. Yearly increases in following years will be no less than $1 per hour less than the minimum wage rate adjusted for inflation.
- "Other" Minimum Wage Rates: The minimum wage rate for Oregon employers that don't fit into either of the categories listed above will increase to $9.75 per hour on July 1, 2016, and then increase by an amount ranging from $0.50 to $0.75 per year, to reach $13.50 per hour in 2022. Yearly increases in following years will be a rate adjusted annually for inflation.
Additional information about the specific minimum wage rates and rate increases for each tier is available at http://www.oregon.gov/boli/WHD/OMW/Pages/Minimum-Wage-Rate-Summary.aspx.
Employers Will Be Required to Provide Additional Information About Pay
After an employer determines how much it is required to pay per hour, the employer may need to prepare to provide additional information to its employees about their pay starting January 1, 2017. Senate Bill 1587 is currently awaiting the Governor's signature and, if signed, will require employers to provide additional written detail regarding an employee's pay and to provide employees with documents related to pay records when an employee requests his or her personnel records.
One of the noteworthy provisions of SB 1587 amends ORS 652.610. That statute currently provides that employers "shall provide the employee on regular paydays with a statement sufficiently itemized to show the amount and purpose of the deductions made during the respective period of service that the payment covers." SB 1587 will amend the statute to require employers to provide an itemized written statement sufficient to show the following specific details:
- Date of the payment;
- Dates of work covered by the payment;
- Employee's name;
- Employer's name and business registry number or business identification number;
- Employer's address and telephone number;
- Employee's rate(s) of pay;
- Whether the employee is paid by the hour, shift, day, or week or on a salary, piece, or commission basis;
- Gross wages;
- Net wages;
- Amount and purpose of each deduction made during the respective period of service that the payment covers;
- Allowances, if any, claimed as part of minimum wage;
- Unless the employee is paid on a salary basis and is exempt from overtime compensation as established by local, state, or federal law, the regular hourly rate or rates of pay, the overtime rate or rates of pay, the number of regular hours worked and pay for those hours, and the number of overtime hours worked and pay for those hours; and
- If the employee is paid a piece rate, the applicable piece rate or rates of pay, the number of pieces completed at each piece rate, and the total pay for each rate.
Another provision of SB 1587 amends Oregon law regarding inspection of personnel records (ORS 652.750) to require that, within 45 days of an employee's request for his or her personnel records, an employer not only provide "the personnel records of the employee that are used or have been used to determine the employee's qualification for employment, promotion, additional compensation, employment termination or other disciplinary action," but also provide "time and pay records of the employee for the period required by the Fair Labor Standards Act, 29 U.S.C. 211(c), and accompanying regulations."
Although Governor Brown has not signed SB 1587, it would be surprising if she didn't do so. So employers should review the documentation they provide employees to make sure that it provides sufficient detail and reach out to their payroll vendors to prepare them for the transition. And although employers should already be preserving the payroll documents referenced in SB 1587, employers should review their recordkeeping and record-collection processes to evaluate whether they are prepared to produce those records within 45 days of a request.
Please contact our employment attorneys if you have any questions about these new statutes, payroll documentation, recordkeeping and collection processes, or other employment law concerns.