By Calvin L. Keith

The Oregon Bureau of Labor and Industries (BOLI) has issued new regulations that provide some clarity on Oregon's overtime law for manufacturing facilities.

A Little Background

In December 2016, BOLI abruptly changed a long-established interpretation of overtime rules for mills, factories, and manufacturing facilities. As a result, those facilities would have been subject to double counting for some overtime (see, Overtime Law Changing for Oregon Manufacturing Employers). In response, the Oregon Legislature passed House Bill (HB) 3458, which eliminated double counting of overtime. 

Unfortunately, as part of the quid pro quo demanded by opponents of the bill, the new law limits the number of work hours for individual employees at a manufacturing facility to 55 hours in 1 week. Employees may consent in writing to work up to an additional 5 hours in a week. The law provides an exception for certain types of undue hardships when perishable products must be processed after harvesting, slaughter, or catch.

BOLI established regulations implementing the new law that became effective January 1, 2018. While many of the regulations simply parrot the law, there are some important enhancements.

Highlights of New Overtime Regs

HB 3458 applies to employees who work in manufacturing facilities, factories, and mills, but BOLI has issued an extensive set of exclusions from the law. The regulations attempt to limit the law's scope to employees who are actively involved in the manufacturing process.

First, covered employees must work in the mill, factory, or manufacturing facility, not merely be associated with it. Employees who work as guards or make repairs or conduct maintenance on the buildings, equipment, or machinery are not covered. Employees who serve food in the mess halls are not covered. Supervisors and managers are not covered, nor are employees who work in shipping or whose duties are primarily administrative in nature. In short, any employee "who is not engaged in the direct processing of goods in the usual course of [his] duties" is not covered.

HB 3458 also makes it clear that employees who are subject to a collective bargaining agreement (CBA) are not covered if the CBA in effect at their worksite limits the required hours of work and provides for overtime pay. The law also anticipates situations in which a CBA has expired, providing that if the limits on working hours and overtime pay continue to be in effect, employees will not be subject to the law. Employees covered by a CBA will be subject to the law if they are on strike or locked out, or if the employer has implemented new terms and conditions of employment.

The law allows employees to request or agree in writing to work more than 55 hours in a week. BOLI has provided a template for written consent. However, the regulations make it clear that employers are not required to use that document as long as they receive written consent or a written request that contains the information required by the law.

The new rules require employees to provide notice of their withdrawal of consent at least 7 days before the start of the workweek for which the consent is withdrawn. If an employer relies on the undue hardship exception, an employee's written consent to work additional hours must be in a form prescribed by BOLI and contain the information required by the law.

Application of the law is based on determinations of a standard workday and workweek. Employers have the right to select a standard workday and workweek. If an employer fails to designate a standard workday, BOLI will consider the workday for any employee to be from the time he commences work until 24 hours later. Similarly, the workweek will be from the time the employee first starts work in a week until seven days later.

Bottom Line

Employers covered by HB 3458 that haven't already done so should clarify their work rules and establish a standard workday and workweek. You should also plan to manage and staff your facility so you can complete the necessary work without working employees more than 55 hours (or 60 hours if employees volunteer for more hours).

You must decide whether to use the BOLI form or another form to document employees' consent to work 60 hours. If you can rely on the perishable goods exception, carefully review the rules and obtain the required BOLI forms.

Employers that have a unionized workforce should review their CBA to determine whether it limits hours worked and provides for overtime pay. Unionized employers may also wish to consider whether to negotiate an hours limitation higher than the limit provided for under the new Oregon law. While unions likely will oppose increases in mandatory overtime limits, they may consider an increase in maximum volunteer overtime hours limits.

Cal Keith, editor of Oregon Employment Law Letter, is an attorney with Perkins Coie LLP in Portland, Oregon. He can be reached at ckeith@perkinscoie.com.