839-020-0030 Payment of Overtime Wages — Generally (1) Except as provided in OAR 839-020-0125 to 839-020-0130, all work performed in excess of forty (40) hours per week must be paid for at the rate of not less than one and one-half times the regular rate of pay when computed without benefits of commissions, overrides, spiffs, bonuses, tips or similar benefits pursuant to ORS 653.261(1). Similar benefits include, but are not limited to, discretionary bonuses, gifts, profit sharing, thrift and savings program, trusts, reimbursements for expenses, holiday, or vacation pay. (2) Definitions: (a) "Work week" means any seven (7) consecutive twenty four (24) hour period as determined by the employer. The beginning of the work week may be changed if the change is intended to be permanent and is not designed to evade the overtime requirements of this rule. For purposes of overtime computation, each work week stands alone; (b) "Regular rate", for purposes of overtime computation, means a regular hourly rate, but in no case will the regular hourly rate be less than the applicable statutory minimum wage rate. In the absence of an express agreement between the employer and the employee which specifies the regular hourly rate, the regular hourly rate is determined by dividing the total remuneration for employment in any work week (excluding commissions, spiffs, bonuses, tips or similar benefits, or any compensation an employer is required to pay an employee under ORS 653.442 or 653.455 ), by the total number of hours actually worked in that work week for which such remuneration was paid. The division will be guided in the application and calculation of regular rate by Title 29, Code of Federal Regulations, Part 778, Subpart C, D and E except when expressly prohibited by ORS Chapter 653 or these rules. (c) “Base rate,” for purposes of computing overtime for domestic workers, means a regular hourly rate, but in no case will the base rate be less than the greater of any applicable statutory minimum wage rate. In the absence of an express agreement between the employer and the employee which specifies the regular hourly rate, the regular hourly rate is determined by dividing the total remuneration for employment in any work week (excluding commissions, spiffs, bonuses, tips or similar benefits), by the total number of hours actually worked in that work week for which such remuneration was paid. The division will be guided in the application and calculation of base rate by Title 29, Code of Federal Regulations, Part 778, Subpart C, D and E pertaining to regular rate except when expressly prohibited by ORS Chapter 653 or these rules. (3) Methods for determining amount of overtime payment under different compensation agreements: (a) Compensation based exclusively on hourly rate of pay: (A) Where the employee is employed solely on the basis of a single hourly rate, the hourly rate is the "regular rate." For hours worked in excess of forty (40) hours in a work week the employee must be paid, in addition to the straight time hourly earnings, a sum determined by multiplying one-half the hourly rate by the number of hours worked in excess of forty (40); (B) For example, a $10 per hour rate will bring, for an employee who works 46 hours, a total weekly wage of $490 (46 hours at $10 plus six hours at $5.00). In other words the employee must be paid an amount equal to $10 per hour for 40 hours and $15.00 per hour for the six hours of overtime, or a total of $490. (b) Compensation based upon piece-rate agreement: (A) Where an employee is employed on a piece-rate basis, the regular hourly rate of pay is determined by adding together the total earnings, (excluding commissions, spiffs, bonuses, tips or similar benefits) for the work week and dividing this sum by the number of hours worked in the week for which such compensation is to be paid; (B) For example, an employee who has earned $500 during a 50 hour work week must be paid an additional sum of $50 for the ten overtime hours, or a total of $550 (50 hours at $10 per hour and the ten overtime hours at $5.00 per hour). (c) Compensation based upon weekly salary agreement for regular work week of less than 40 hours: (A) Where the employee is employed on a weekly salary for a regular work week of fewer than 40 hours, the regular hourly rate of pay is determined by dividing the salary by the number of hours agreed to be worked in the work week which such salary is intended to compensate; (B) For example, if an employee is hired at a salary of $525 and it is understood that this salary is compensation for a regular work week of 35 hours, the employee's regular rate of pay is $15 per hour ($525 divided by 35 hours). Thus, where the employee works in excess of 35 hours in a given work week such employee must be paid $15 per hour for each of the first 40 hours and $22.50 per hour (one and one-half times $15) for each hour worked in excess of 40 hours in such work week. (d) Compensation based upon a weekly salary agreement for a regular work week of 40 hours: (A) Where the employee is employed on a weekly salary for a regular work week of 40 hours, the regular hourly rate of pay is computed by dividing the salary by 40 hours; (B) For example, where an employee is hired at a salary of $600 and it is understood that this weekly salary is compensation for a regular work week of 40 hours, the employee's regular rate of pay is $15 per hour and such employee must be compensated at the rate of $22.50 per hour for each hour worked in excess of 40 hours in such work week. (e) Compensation based upon weekly salary agreement for regular workweeks of more than 40 hours: (A) If the employee is employed on a weekly salary which is the agreed compensation for a set number of hours in excess of 40, the regular hourly rate of pay is determined by dividing the weekly salary by the set number of hours which such salary is intended to compensate; (B) For example, where an employee is hired at a weekly salary of $675 and it is understood that this weekly salary is compensation for a regular work week set at 45 hours, the employee's regular rate of pay is $15 per hour and such employee must be paid an additional sum of $37.50 for such work week or a total of $712.50 (45 hours at $15 per hour and the five overtime hours at $7.50 per hour). The employee must be paid an additional $22.50 per hour for each hour worked in excess of 45 hours in such work week. (f) Compensation based upon an agreed fixed salary for fluctuating hours (fluctuating workweek method for payment of overtime): (A) An employee employed on a fixed salary may have hours of work which vary from work week to work week and the salary may be paid to the employee pursuant to an understanding with the employer that such employee will receive such fixed amount of compensation for whatever hours the employee is called upon to work in a work week, whether few or many. Where there is a clear mutual understanding of the parties that the fixed salary is compensation for the hours worked each work week, whatever their number, such a salary arrangement is permitted if the amount of the salary is sufficient to provide compensation to the employee at a rate not less than the applicable statutory minimum wage rate for every hour worked in those work weeks in which the number of hours worked is greatest, and if the employee receives overtime compensation, in addition to such salary, for all hours worked in excess of 40, at a rate not less than one-half the regular rate of pay. Since, under such an arrangement, the number of hours actually worked will fluctuate from work week to work week, the regular rate of the employee will vary from week to week and is determined by dividing the number of hours worked in the work week into the amount of the salary to obtain the applicable regular hourly rate for any given work week. Payment for overtime hours worked in excess of 40 hours in such work week at one-half such hourly rate in addition to the salary satisfies the requirements of this rule because such hours have already been compensated at the regular rate, under the salary arrangement. The following examples, based upon a weekly salary of $400, are offered by way of illustration: (i) Work week #1 — 50 hours worked; the employee's regular rate of pay is $8 per hour and the employee must be paid an additional sum equal to one-half the regular rate times the ten overtime hours worked or $40, making the total compensation for that work week $440; (ii) Work week #2 — 60 hours worked; the employee's regular rate of pay is $6.67 per hour, which is less than the required state minimum wage rate. The employee must be paid an additional sum equal to the difference between the employee's weekly salary of $400 and the total of the amount the employee earned at the minimum wage for 40 hours plus one and one-half times the minimum wage rate for the hours worked over 40 during the work week (40 hours X minimum wage rate + 20 hours X 1.5 X minimum wage rate). (B) The fluctuating work week method for the payment of overtime does not apply to employers covered by the federal Family Medical Leave Act of 1993, 29 USC 2601, et. seq., who comply with the Code of Federal Regulations regarding the nonpayment of leave time authorized by the Act and the special exception pertaining to the payment of overtime under the fluctuating workweek method ([S]see 29 CFR, Part 825.206 (b) and (c)). Employers who select this method for paying overtime and who are covered by this Act but choose not to comply with 29 CFR 825.206, must comply with this rule. (g) Fixed salary for periods other than work week: Where a salary covers a period longer than a work week, such as a month, it must be reduced to its work week equivalent. A monthly salary is subject to translation to its equivalent weekly wage by multiplying by 12 (the number of months) and dividing by 52 (the number of weeks). A semi-monthly salary is translated into its equivalent weekly wages by multiplying by 24 and dividing by 52. Once the weekly wage is arrived at, the regular rate of pay and the amount of any overtime pay is determined as provided by this rule. (4) Notwithstanding ORS 653.020, the computation of overtime in any given work week for any domestic worker will include all “hours worked” as that term is defined in OAR 839-020-0040 through -0046. [Publications: Publications referenced are available from the agency.] Statutory/Other Authority: ORS 183 & 653 Statutes/Other Implemented: ORS 653.261 History: BLI 10-2022, minor correction filed 09/13/2022, effective 09/13/2022 BLI 15-2018, amend filed 06/08/2018, effective 07/01/2018 BLI 19-2015, f. 12-22-15, cert. ef. 1-1-16 BLI 7-2003, f. 12-31-03, cert. ef. 1-1-04 BLI 1-2002, f. & cert. ef. 1-9-02 BL 9-1996, f. & cert. ef. 10-8-96 BL 1-1990, f. 2-27-90, cert. ef. 2-28-90 BL 1-1987, f. & ef. 1-12-87