BOLI’s New Complicated Rules for Payment of Minimum Wage by Region

[vc_row][vc_column][vc_column_text]BOLI’s New Complicated Rules For Payment Of Minimum Wage By Region


By: Randall Sutton

Management-Side Employment Law

Saalfeld Griggs PC


The first of several significant annual increases to Oregon’s minimum wage are effective July 1st.  The rate of increases will vary by geographic region.  Within the Portland Urban growth boundary, the  minimum wage increases most quickly, starting at $9.75/hr on July 1, with a big increase to $11.25 in 2017, and eventual increases to $14.75 by 2022.  For Salem employers, non-rural counties, including Marion & Polk counties, will start at $9.75 and increase more slowly to an eventual $13.50 minimum wage in 2022.


Of course, this begs the question as to which rate applies to any given employer. Reading the statute, that seems quite simple. The statute provides that the applicable rate depends on where “the employer is located.”  Unfortunately, nothing in life is ever quite that simple.  BOLI has complicated the question by releasing rules yesterday that require employers to evaluate the location of work for each worker when determining the applicable rate. Despite the statue’s clear guidance, the new BOLI rules focus on where the employee is located, not where the employer is located, and that determination can change every pay period.


The rules are summarized as follows:


  • Work performed at a permanent fixed business location of the employer. Where at least 50% of a worker’s hours are performed at the employer’s permanent fixed business location, the worker is paid the minimum wage rate for the region where the business is located.


  • Delivery Personnel who begin/end work at fixed location. If a worker’s job involves making deliveries, and the route starts and ends at the employer’s permanent fixed business location, the worker is paid the minimum wage rate for the region where the business is located.


  • Work performed other than at the employer’s permanent fixed business location. Where the worker spends more than 50% of the pay period working somewhere other than the employer’s fixed business location, the employer must pay the minimum wage rate for the region where the worker actually performs work. Under this method, the employer will need to track when and where the employee worked throughout the pay period, and pay the applicable rate for each of those hours. In the alternative, the employer may pay the worker for all hours worked during the pay period at the highest applicable rate.


As you can see, the new rules can place a heavy burden on tracking employees who work in multiple locations. It also complicates timekeeping for employers who frequently work in the field or at remote job sites. Knowing the precise location of the county line or urban growth boundary line is now important, and the new rules require the moment when the worker crosses that line to be precisely calculated. Where tracking the travel habits of multiple workers becomes overly burdensome, employers will likely opt for paying the highest regional rate for all hours worked.  In any event, no matter how an employer chooses to comply with these rules, we recommend that personnel policies be updated to address these new requirements.


Randall Sutton leads the firm’s Employment Law & Litigation practice group. The information in this article is not intended to provide legal advice. For professional consultation, please contact Randall Sutton at Saalfeld Griggs PC.  503.399.1070.[/vc_column_text][/vc_column][/vc_row]