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Overtime Exemptions in Oregon

Whether an employee is entitled to overtime, or whether they qualify for one of the statutory exemptions therefrom, is one of the trickier employment law issues and is a frequent topic of cases we handle for both our employer and employee clients. For employers, the stakes are high. Misclassification of a category of employees as exempt from overtime can lead to costly class action litigation, employee resentment or both. For employees the stakes are high, too. Those who have been wrongly classified as exempt from overtime could be missing out on tens of thousands of dollars in unpaid wages going back as far as three years.

Misclassification claims are attractive to plaintiffs not only because of the possibility of lucrative class-action litigation, but because the burden is flipped. Typically in employment litigation (as with all civil litigation), the burden is on the employee/plaintiff to prove that the employer/defendant owes her money. In claims alleging unpaid overtime due to misclassification, the burden is on the employer to prove that the employee was properly classified as exempt. Litigation is always harder on the parter with the burden of proof, and misclassification claims are no different. Not only that, plaintiffs can win liquidated damages and their attorneys fees should they win a misclassification claim.

The general rule in Oregon is that all employees are entitled to overtime pay (computed at 1.5 times the employee’s regular rate of pay) for all hours worked over 40 in a workweek (ORS 653.261). However, certain, limited categories of employees are exempt from this requirement (OAR 839-020-0005). Specifically, those employees engaged in Administrative, Executive, ProfessionalOutside Sales Work, Retail Sales or who are exempt under the Motor Carrier Exemption need not be paid overtime, provided they meet certain, defined criteria.

A widely held misconception about overtime is that employees who are paid a salary need not be paid overtime. That is simply not true. Whether an employee is paid a salary is simply one element of a multi-element test Oregon courts use to determine whether an employee is properly classified as exempt from overtime under the Administrative and Executive exemptions. Several other requirements also must be met for the exemptions to apply. For instance, an employee’s primary duty must be management or administrative, and the employee must exercise discretion and independent judgment under minimal supervision. The success of the white-collar exemptions typically rises and falls on the answers to those questions – not whether the employee was paid a salary.

Each exemption has its own specific rules, and determining whether an employee is properly classified can be a fact intensive inquiry. If you are an Oregon employer grappling with how to classify your employees, or an Oregon employee wondering whether you might be entitled to overtime, give us a call.




Oregon Whistleblower and Retaliation Laws

In Oregon, it is unlawful for employers to retaliate against employees who make complaints. As an Oregon employer or employee, you probably already knew this. As with most work-place rights, the devil is in the details, and those details can sometimes be elusive. Whether an employee is protected from retaliation depends on variety of factors, such as whether the employer is public or private, the nature of employee complaint, and to whom it was made.

There are several Oregon statutes that protect employees from retaliation. The one that most Oregon lawyers know and litigate is ORS 659A.199. It protects all employees who, in good faith, report information that the employee “believes is evidence of a violation of a federal or state law, rule or regulation.” To be protected, the report must be refer to events that that employee in good faith believes to be unlawful or criminal. Because the statute is designed to encourage such reports,  the conduct need not actually be unlawful for the report to be protected. It is the employee’s good faith belief in the unlawfulness of the activity that controls. Oregon employees have whistleblower protection under the statute for internal and external reports, so long as the report is “intended or likely” to result in enforcement of the law. Employees who prevail in an ORS 659A.199 lawsuit can recover economic damages, emotional distress damages, and their attorneys fees.

While ORS 659A.199 offers broad protection from retaliation for Oregon whistleblowers, it is not the only statute that protects workplace complaints. The following laws also protect Oregon workers from retaliation:

  • ORS 659A.230 – Protects public employees from retaliation for reporting criminal activity
  • ORS 652.355 – Protects employees from retaliation for making a wage claim or discussing, inquiring about or consulting an attorney about a wage claim.
  • ORS 659A.030(1)(f) – Protects employees from retaliation for opposing unlawful discrimination (such as race, sex, national origin, or sexual orientation discrimination)
  • ORS 659A.040 – Protects employees from retaliation for applying for worker’s compensation benefits
  • ORS 659A.096 – Protects employees from retaliation for applying for or even inquiring about taking family medical leave

While the precise contours and scope of these laws vary, they all share one important trait: they protect Oregon employees from retaliation or discrimination for invoking their statutory legal rights. If you are an Oregon employer or employee with questions about workplace retaliation laws, we encourage you to contact us.

Intern vs. Employee?

Federal and Oregon law require that all employers pay their employees. But does the law require that interns be paid?  Maybe, maybe not. It depends on whether the worker meets a fairly stringent legal test. There has been a recent a uptick in litigation over whether workers are actually bona-fide interns (which need not be paid wages), or employees in disguise (which are entitled to minimum and overtime wages).

Generally, courts look the following factors to determine whether a worker is properly classified as an intern or employee:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment.
  2. The internship experience is for the benefit of the intern.
  3. The intern does not displace regular employees, but works under close supervision of existing staff.
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

There have been several high-profile internship cases lately. For example, in June 2013 a New York judge ruled that two workers were misclassified as interns and should have been paid for their work on the famous film, The Black Swan. Because the workers conducted tasks that normally would be done by employees and their labor was primarily for the benefit of Fox Searchlight and not for their own educational or career advancement, the judge determined that they should have been paid for their work. In October 2013, publishing giant Condé Nast faced similar complaints from interns working for magazines the company published.  In the face of these complaints Condé  Nast scrapped their internship program.  Both the film and media industry routinely used unpaid interns in the past.

Closer to home, in November,  2013 the Bureau of Labor and Industry here in Portland, Oregon made a decision that one worker at the Portland Timbers Franchise was misclassified as an intern and should have been paid for her work as an employee.  The worker in question was supervising paid coaches at a soccer camp for weeks at no pay  without receiving any significant training and educational benefit.

Our office has prosecuted and defended wage claims stemming from unpaid internships. If you are an employee or employer with questions about internship pay obligations, we can help.


City of Portland Sick Time Law

Starting in January 2014 employers located within the city of Portland who employ more than 6 workers are required to give their employees paid sick time off.  The new law, called the Protected Sick Time Ordinance, states that for every 30 hours an employee works that employee will accrue one hour of paid sick leave.  The employee can then use this time during the year.  The employer must allow the employee to accrue this leave time for up to 40 hours per calendar year.  The law only applies to employees who have worked at least 240 hours within the city of Portland’s boundaries.  The sick leave can be used to treat an employee’s own mental or physical health condition or the health condition of a family member.  No proof of illness such as a doctor’s note is required in order for the employee to take the sick leave time. According to the city of Portland the purpose of the ordinance is “to mitigate the spread of disease and to allow employees to care for themselves and family members, making Portland a healthier, more productive community.”



Protected leave laws have been in existence at the state and federal level for decades.  The main difference between these laws and the Portland ordinance is that the Portland law provides that most employers must pay the employee while he or she is on leave.  While both the Oregon Family Leave Act  and Family Medical Leave Act require covered employers to provide leave for serious health conditions to eligible employees, they do not require that the leave be paid.

Another difference between Portland’s protected sick time law and FMLA/OFLA is that the Portland ordinance does not require proof of a ‘serious health condition’ in order to take the time off.  The Portland ordinance’s sick leave time can be used for a simple head cold or mild illness while OFLA and FMLA leave are designed to protect employees or their family members who have suffered from a serious mental or physical health issue.  In short, Portland’s new sick time ordinance is a more liberal leave law and more favorable to employees than most other leave laws in the United States. Employers should know the law so they can comply with it. Employees should know it so they can assert their rights under it.