Employer Update: 8-Hour Overtime Bill Faces Legislative Opposition

Since 1985, Oregon law has required employers to pay overtime (time and a half) to non-exempt employees when those employees work more than 40 hours in one week. There are some exceptions to this general rule; for example, employers need not pay overtime to so-called "exempt employees," as well as to farm laborers, taxi drivers, nurses, firefighters, federal workers, and certain other categories of workers. Also, manufacturing employers already pay overtime to employees who work more than ten hours in one day.

Employers should be aware, however, that an initiative is underway that could require employers to pay overtime to certain employees after eight hours worked in a single day, instead of after 40 hours within a week. If successful, this pro-employee initiative would make Oregon's overtime laws consistent with the states of California, Colorado, and Alaska (as well as Puerto Rico and the U.S. Virgin Islands). House Bill 2673, sponsored by Oregon's Labor Commissioner Dan Gardner, is currently under consideration by the 2007 Legislature. While the bill has not gathered much momentum within the House, its supporters have a backup plan.

The Impact on Employers
HB 2673 would authorize the Bureau of Labor and Industries to issue regulations requiring employers to pay overtime to applicable employees after eight hours of work in one day. However, like other states that have adopted this model, in some cases employers could avoid this requirement. For example, the law would allow employers to formally schedule "alternative workweeks" such as four, 10-hour days or three, 12-hour days, within which overtime need not be paid for the hours worked after eight on a given day. Further, the existing rules exempting certain categories of workers from overtime would remain in place under the bill.

Commissioner Gardner promotes the bill as a "pro-family values" measure, because it would require employers to pay a premium to employees who are required to spend more than eight hours away from their family. Supporters add that the law would protect employees that have inflexible family obligations (such as caring for sick relatives or children in daycare) from working longer hours than planned at their employer's whim.

Response to Industry and Legislative Opposition
Not surprisingly, various employer groups oppose HB 2673. Associated Oregon Industries (AOI) says the bill contradicts the idea of 'family friendly' and 'business friendly' work practices, because it ignores the wishes of those workers that would prefer to work additional hours in order to leave work earlier on another day, in order to have family time. AOI adds that the bill would eliminate employer flexibility and could drive employers out of Oregon and into more business-friendly states. The League of Oregon Cities points out that the bill could establish a new bargaining standard in future collective bargaining agreements, and has expressed concern about the bill's potentially negative impact on city budgets and on the flexible work schedules covering some non-exempt employees. Other commentators reinforce the idea that employers need flexibility in scheduling their work force, and suggest that employees appreciate that flexibility.

In part due to this opposition, HB 2673 has lost steam with the House Business and Labor Committee. After a public hearing was held on April 13, the bill appears to be all but dead. In response, Commissioner Gardner - together with Representative Diane Rosenbaum and the Oregon AFL-CIO - is exploring an alternative approach: placing the issue before Oregon's voters via a ballot initiative. In a recent press release, supporters announced their intention to place the "8-Hour Day Overtime Act" on the ballot in November, 2008. By all indications, the coming ballot initiative will mirror the provisions of HB 2673.

Stay Informed
While it appears that HB 2673 will not make much progress in the Legislature, a number of other bills affecting Oregon employers continue to make their way through the legislative process. Dunn Carney's employment law practice group will closely monitor HB 2673, the "8-Hour Day Overtime Act" ballot initiative, and related legal developments. As those measures progress, we will keep our employer and closely held business clients updated on possible changes that may impact your business. If you would like more information about bills or laws which may impact your business, please contact Randall L. Duncan, Chair of our Closely Held Business Team, or Robert Kerr, a partner in Dunn Carney's employment law practice group. We will be happy to accommodate your request.

Closely Held
Business Team

The Closely Held Business Team - Dunn Carney is dedicated to assisting business owners in navigating through the opportunities and challenges the law presents to advance each owner’s success in business. They understand the multifaceted issues business owners face each day and the need for responsive and proactive legal counsel.

Team members include:
Randy Duncan, Team leader
Bob Allen
Ric Ashe
John Barhoum
Merrill Baumann
David Buono
Brian Cable
Jack Cooper
Ken Davis
Tim Hering
Frank Hilton
Elizabeth Howard
Scott Jonsson
Robert Kerr
JoDee Keegan
Kelly Martin
David Rossmiller
Eric Smith
Kyle Stinchfield
Dan Vidas
Matt Wilmot
Bob Winger
David Zehntbauer