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As we approach summer, and employers begin their seasonal hiring processes, identification of how wage and hour laws apply to seasonal employees can significantly mitigate employer liability. As a rule, both federal and Oregon laws require employers to pay nonexempt employees at least minimum wage for all hours worked and overtime compensation for any hours that exceed 40 hours in a workweek.

However, both state and federal laws contain exemptions to this general requirement for certain seasonal employees. Employers should carefully review the applicable criteria before determining whether their seasonal employees qualify as exempt under either one law or both.

State law exemption

Under state law, seasonal employees working at a nonprofit organized camp, or an organized camp operated for profit with a gross annual income of less than $500,000, are generally exempt from minimum wage and overtime requirements.

For purposes of this statute, an 鈥渙rganized camp鈥� is defined as a 鈥渄ay or resident camp 鈥� established to give campers recreational, religious or educational experiences in cooperative group living.鈥� A camp may qualify under this definition regardless of whether the camp is primarily used by an organized group or by the public, and regardless of whether the activities or facilities are provided free of charge or for a fee.

Even if employees qualify for an exemption to minimum wage and overtime requirements under state law, additional requirements related to hours worked may still apply depending on the age of the employee. Although minor employees may qualify as exempt from state minimum wage and overtime laws, they are still subject to restrictions on the number of hours they can work each week.

Specifically, employees who are 16 or 17 years old and employed by organized youth camps may not work more than 44 hours per week, and employees under the age of 16 years old may not work more than 40 hours in one week, or 8 hours in one day when school is not in session.

Federal law exemption

Under the Fair Labor Standards Act (FLSA), employers operating an amusement or recreational establishment, an organized camp, or a religious or nonprofit educational conference center may hire seasonal employees who are exempt from federal minimum wage and overtime laws, provided that at least one seasonality test is met.

Notably, the FLSA has two separate tests for determining whether employees meet the definition of a seasonal employee. Both tests look to the nature of the business rather than the work performed by employees, and only one of the tests must be met to qualify for the exemption.

The calendar test focuses solely on the general dates of operation for the business. If the business 鈥渄oes not operate for more than seven months in any calendar year,鈥� any employees hired by the business are considered seasonal employees for purposes of this exemption. This assessment is usually based on both the current calendar year (defined as the period between Jan. 1 and Dec. 31) and previous one. Importantly, the term 鈥渙perates鈥� under the statute is specific to when the establishment is used specifically for amusement or recreational purposes. The test is still met if an establishment is used for amusement or recreation for seven months or fewer in the calendar year, even if the establishment remains open for the remainder of the calendar year but for different purposes.

The receipts test focuses instead on the receipts and income generated by the business. An establishment satisfies this test if, during the preceding calendar year, its average receipts for any six months of that year did not exceed 33.3 percent of its average receipts for the other six months of that year. In essence, this test is met if the business鈥� average receipts during its slowest six months are 33.3 percent or less of its average receipts during the other six months of the calendar year.

Takeaways

Employers hiring seasonal employees to perform work at certain camps or recreational establishments this summer should carefully consider whether their seasonal employees are exempt from state and federal minimum wage and overtime laws prior to treating the employees as exempt. Notably, an employer may qualify for this exemption under one set of laws, while remaining subject to the other (e.g., qualifying as exempt from Oregon鈥檚 overtime and minimum wage requirements, while remaining subject to the FLSA鈥檚 requirements).

To qualify as exempt under state law, the business must be either a nonprofit organized camp, or a for-profit organized camp that generates less than $500,000 in annual gross income.

To qualify as exempt under federal law, the business must be an amusement or recreational establishment, an organized camp, or a religious or nonprofit educational conference center as well as satisfy at least one of the seasonality tests.

Even if seasonal employees are otherwise exempt from overtime and minimum wage requirements, other wage and hour laws may still apply, including meal and rest break requirements and workweek hour restrictions for minor employees. Thus, employers that hire potentially exempt seasonal employees should still carefully track and document the applicable laws and requirements.

Ashley Korkeakoski-Sears is an attorney with Barran Liebman LLP. She advises and represents employers on a wide range of workplace issues. Contact her at 503-276-2132 or聽[email protected].

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither the author nor the 91视频 guarantees the accuracy or completeness of any information published herein.