839-001-0470 Penalty for Failure to Pay Wages on Termination of Employment (1) When an employer willfully fails to pay all or part of the wages due and payable to the employee upon termination of employment within the time specified in OAR 839-001-0420, 839-001-0430 and 839-001-0440, the employer will be subject to the following penalty: (a) The wages of the employee will continue to accrue from the date the wages were due and payable until the date the wages are paid or until a legal action is commenced, whichever occurs first; (b) The employee's wages will continue to accrue at the employee's hourly rate of pay times eight (8) hours for each day the wages are unpaid; (c) The maximum penalty will be no greater than the employee's hourly rate of pay times 8 hours per day times 30 days. (d) Except as provided in subsection (e), the wages of an employee that are computed at a rate other than an hourly rate (e.g. salaries) will be reduced to an hourly rate for penalty computation purposes by dividing the total wages earned during the wage claim period (the period for which wages are owed and upon which the wage claim is based) by the total number of hours worked during the wage claim period. (e) Notwithstanding subsection (d), when wages are earned based on commission, bonus, piece rate, or other methods not based on hours worked, the wages will be reduced to an hourly rate for penalty computation purposes by dividing the total wages earned in the last 30 calendar days of employment by the total number of hours worked in the last 30 calendar days of employment. If the employee was employed for less than 30 days, the total wages earned during the entire period of employment will be divided by the number of hours worked during the entire period of employment. (2) If the employer pays the full amount of unpaid wages within 12 calendar days after the written notice of such unpaid wages is sent by the employee or a person on behalf of the employee, the penalty may not exceed 100 percent of the employee's unpaid wages. (a) If the employee or person on behalf of the employee fails to send the written notice of unpaid wages to the employer, the penalty may not exceed 100 percent of the employee's unpaid wages. (b) Subsection (2) does not apply when the employer has violated ORS 652.140, 652.145 one or more times in the year before the employee's employment ceased or the employer terminated one or more other employees on the same date that the employee's employment ceased. (c) For purposes of determining when an employer has paid wages or compensation under this subsection, payment occurs on the date the employer delivers the payment to the employee or sends the payment by first class mail, express mail or courier service to the employee's last-known address. (3) Additional actual wages owed to an employee in any pay period for which the employer has timely paid the employee any estimated wages due and payable in compliance with OAR 839-001-0420(3)(b) are not considered unpaid wages subject to the penalty provisions of section (1) of this rule unless the employer fails to pay the employee the additional actual wages owed for such pay period within the time required under 839-001-0420(3)(c). (4) In addition to any other penalty provided by law, the Commissioner of the Bureau of Labor and Industries may assess a civil penalty not to exceed $1000 against any person who violates ORS 652.140 and 652.145 or any rule adopted pursuant thereto. (5) When an employer shows that it was financially unable to pay the wages at the time the wages accrued, the employer will not be subject to the penalty provided for in OAR 839-001-0470. If an employer continues to operate a business or chooses to pay certain debts and obligations in preference to an employee's wages, there is no financial inability. Statutory/Other Authority: ORS 652.165 Statutes/Other Implemented: ORS 652.150 History: BLI 27-2005, f. 12-29-05, cert. ef. 1-1-06 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