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Court Rejects BOLI's Position In Manufacturing Overtime Dispute

March 16, 2017

By J. Kent Pearson, Jr.

With certain exceptions, including supervisors and employees working in non-production areas, ORS § 652.020 provides that Oregon employees working in mills, factories, and manufacturing establishments are entitled to daily overtime at time and one-half the regular rate of pay for hours worked in excess of ten hours in a day.  Generally, such employees also are subject to the standard overtime requirement under ORS § 653.261 for hours worked in excess of forty hours in a week.  Until recently, BOLI’s guidance on the interplay between the two statutory requirements instructed employers to calculate the daily and weekly overtime and pay the higher of the two.
In late 2016, BOLI changed its longstanding interpretation and announced that effective January 1, 2017, affected employers must pay both the daily overtime and the weekly overtime amounts.  According to BOLI’s interpretation, for example, employees working four daily shifts of eleven hours each would be entitled to four hours of daily overtime plus four hours of weekly overtime for a total of eight overtime hours per week. 
Recently, urging a similar, but slightly different approach, plaintiffs filed a class action lawsuit in Multnomah County Circuit Court challenging the employer’s failure to pay both daily and weekly overtime.  The employer moved against the complaint, seeking dismissal of the overtime claim.  Last week, on March 9, 2017, after hearing oral argument from the parties, the trial court issued its opinion dismissing the claim that sought both daily and weekly overtime.  Of course, the case is not yet final and the decision is subject to appeal, but the trial court decision is an encouraging development.  Bullard Law will continue to monitor the litigation for its impact on Oregon employers operating manufacturing facilities and factories.
On April 18, 2017, Bullard Law will conduct a workshop addressing the impact of the court’s ruling, the continued validity of the 2017 BOLI interpretation, and strategies for managing overtime risk going forward.  To register, please contact Coni Crone at (503) 248-1134 or register for the workshop here.