Final minimum wage rules filed on employer location

By: Associated Oregon Industries
On June 15, the Oregon Bureau of Labor and Industries (BOLI) filed final rules implementing the minimum wage increases of the 2016 Legislative Session.

SB 1532 increased Oregon’s minimum wage over six years, starting July 2016. The bill divides the state up into three regions; wages are to be paid based on the location of the employer. The bill gave BOLI rulemaking authority to define “employer location.” This definition is critical to many employers, as the bill established not one, but three different minimum wages, depending on the region of the state in which the employer is located. Most employers have a fixed location and workers report to and work at that fixed location. However, many types of employees move in and out of different regions on a regular basis – landscape crews, pick-up and delivery services, security services, etc. For those employers, the definition of employer location, which dictates the wage paid to an employee, is of critical importance.

During committee meetings and on the floor of the Senate, legislative sponsors of the bill clearly stated that an employer’s location was the place an employee reported to on a regular basis. Yet, when early drafts of the rules were published, BOLI appeared to be focusing entirely on the location of the employee’s work, instead of the location of the employer’s facility.

Several weeks of tough negotiations followed, and although Associated Oregon Industries (AOI) does not agree with or support the provisions of the final rules, they are markedly improved from early drafts.

New rules-key provisions:

  • If an employee performs more than 50 percent of their work (per pay period) at a permanent fixed business location in Oregon, the employee’s wages will be based on the location of the business
  • Delivery drivers who begin and end their day at a permanent fixed business location will be paid based on the location of the business
  • If an employee performs more than 50 percent of their work (per pay period) in a location other than the employer’s fixed location, the employee is to be paid based on where they actually perform the work
  • If an employee works in more than one region during a pay period, the employer must maintain records of where the work was performed, and pay wages based on those records. Alternatively, an employer may choose to just pay the employee the highest minimum wage of any of the regions where the employee works.

Clearly, the last provision will involve extensive recordkeeping for employers, which is both costly and burdensome. In the coming months, AOI’s employment committee plans to discuss options for addressing this new, unfair burden on employers. In the meantime, please communicate your thoughts and problems you are having with the new rules to Betsy Earls, at betsyearls@aoi.org.

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