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As you have likely heard by now, Oregon has adopted significant minimum wage law changes that will take effect July 1, 2016. The new rate will increase annually in established increments until 2023. Thereafter, the rate will be adjusted for inflation as calculated by the Bureau of Labor and Industries commissioner.

The new rate schedules are also split up into three defined geographic regions: 1, the counties located within the Portland Metro Service District (i.e., Clackamas, Multnomah and Washington); 2, the 鈥渘onurban counties鈥� (i.e., Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa and Wheeler); and 3, the remaining counties, which BOLI refers to as the 鈥渟tandard鈥� region (i.e., Benton, Clatsop, Columbia, Deschutes, Hood River, Jackson, Josephine, Lane, Lincoln, Linn, Marion, Polk, Tillamook, Wasco and Yamhill).

Just under the wire, BOLI last week rolled out new rules that are intended to define how the 鈥渆mployer location鈥� will be determined now that it determines the applicable minimum wage rate.聽 Here are the key take-aways:

鈥� For purposes of determining the applicable region and minimum wage rate, the employer鈥檚 鈥減ermanent fixed location鈥� in Oregon will govern if the employee performs at least 50 percent of the work for that pay period at that location.

鈥� If an employee makes deliveries as part of his or her duties, the 鈥減ermanent fixed location鈥� of the employer will still govern the appropriate region/minimum wage rate if the employee begins and ends regular work days at that same location. For example, a delivery driver who reports to work at the main office/distribution center in Gresham and makes deliveries to Pendleton and back during the same work day along the I-84 corridor would be required to make no less than the applicable minimum wage in effect for Gresham. For this year (July 1, 2016- July 1, 2017) that means $9.75 per hour.

鈥� When more than 50 percent of an employee鈥檚 compensable time for a pay period is in a location other than the 鈥減ermanent fixed location,鈥� the 鈥渆mployer location鈥� for purposes of determining minimum wage rate is the region in which the majority of work is performed. For example, if the employer鈥檚 corporate office is in Portland but it has employees who perform the majority of their work from a branch office in Enterprise, then the employees must be paid at least the applicable minimum wage in effect for the region covering Enterprise, which until July 1, 2017 will be $9.50 per hour.

鈥� If none of the above apply and the employee works in more than one region in a single pay period, he or she must be paid either: 1, at least the minimum wage for each hour in each region where the work is performed, and the employer must keep records to reflect where the work was performed; or 2, the highest wage rate required in any region where work was performed by the employee for all hours worked in that pay period. If the employer chooses this option, it will be excused from having to keep records of where the work was actually performed.

鈥� If employees perform work in more than one region in a pay period, the employer is required to maintain records of all locations worked unless the limited exception outlined above is met.

So, what should Oregon employers do now?

Again, these rules go into effect July 1, 2016. Employers with employees working in Oregon should make sure their pay practices are in line by that date, and ask for help from a qualified professional in advance if needed. At a minimum, they should:

鈥� Prepare to pay the (new) appropriate minimum wage. If, based upon the rules outlined above, the employee is being paid more than one hourly rate within a single pay period, the applicable rates should be accurately reflected on the pay stub. For example, if a minimum wage employee worked 26 hours in Umatilla County and 14 hours in Clackamas County, the pay stub should reflect 26 hours at $9.50 per hour (the 鈥渘onurban鈥� region rate for this year), and 14 hours at $9.75 per hour (the Portland-metro rate for this year). In the alternative, the employer can opt to pay the entire 40 hours at the higher rate of $9.75. Employers should take time to evaluate these options and make that decision now, so that payroll personnel have appropriate instructions in time to implement the decision and uniformity and consistency can be maintained going forward.

鈥� Keep records of where the work is performed. This is mandatory for employees working in more than one of the defined regions in a single pay period, unless they will be paid the highest rate for all time worked. Even if not, employers in Oregon may be wise to consider doing so as a best practice to be able to demonstrate compliance in the event of a challenge or audit.

鈥� Make sure the current minimum wage rate posters are posted. BOLI has published versions that are available at: www.oregon.gov/boli/WHD/pages/minimum_wage_posters.aspx.

Remember that these new rules and minimum wage rate changes did not alter the exemptions offered to certain industries and types of work, such as the exemptions available to certain agricultural employees, piece rate workers, and domestic workers. However, given the increase to the minimum wage amount, it is more important than ever to make sure an employee truly meets an applicable exemption, or the employer may risk having to pay both the increased amount of unpaid wages, but also potential penalties and attorneys鈥� fees if they have been proven later to have gotten it wrong.

Amy Robinson is an attorney in Jordan Ramis PC鈥檚 employment law practice group. She previously served as a human resources professional. Contact her at 503-598-7070 or [email protected].