After the Oregon Bureau of Labor and Industries (BOLI) made a surprising change to its interpretation of how daily and weekly overtime should be calculated for employees who work in mills, factories, and manufacturing establishments, last week the Multnomah County Circuit Court issued an opinion rejecting BOLI’s new interpretation. In its opinion, the court held that BOLI’s original interpretation—i.e., that manufacturers are required to pay the greater of daily or weekly overtime hours worked by employees in a workweek (but not both)—was the correct way to construe manufacturers’ obligations under ORS 653.261 and 652.020.

According to the court, a manufacturing employer subject to both ORS 653.261 and ORS 652.020 must calculate both daily and weekly overtime in a workweek and pay the greater of the two amounts. The court reasoned that this interpretation creates a consistent reading of the two overtime statutes, prevents “double-counting” of overtime hours, and ensures all work performed in excess of 40 hours per week is paid at the rate of no less than one and one-half times the regular rate of pay.

The court’s rejection of BOLI’s new guidance on calculating daily and weekly overtime, which is reflected in BOLI’s updated Field Operations Manual, may not be the last word on this issue.  The plaintiffs may seek review in an appeal to the Oregon Court of Appeals. However, before any such review might occur, the Oregon legislature could pass Senate Bill 984, which is intended to eliminate any ambiguity as to the calculation of daily and weekly overtime under ORS 652.020 and ORS 653.261 in a manner consistent with the court’s ruling.

For manufacturing employers subject to ORS 653.261 and 652.020, the new court opinion is an important consideration in determining compliance obligations.

Stay tuned to the Ogletree Deakins blog for further updates regarding the daily and weekly overtime obligations of mills, factories, and manufacturing establishments.