Many employers mistakenly believe that paying an employee a salary automatically means that they do not need to track the person’s hours worked. Employers are required to classify workers as exempt or nonexempt under the Fair Labor Standards Act (FLSA) and Oregon wage and hour laws, yet many are unfamiliar with the rules or unsure whether they are applying them correctly. Knowing these standards — and accurately classifying employees — is essential to staying compliant and avoiding legal complications.

Properly classifying an employee under the FLSA and Oregon law typically depends on a two-part test: 1, evaluating each job description or category individually using a “duties test” and 2, ensuring the employee is compensated on a salaried basis.

Duties test

The most used exemptions are the “white collar” ones, which evaluate the duties of employees in executive, administrative, and professional roles:

1. Executive/supervisory: This exemption applies when an employee’s primary role is managing or supervising a team or department. Employees in this category typically exercise independent judgment, have authority to hire or fire (or their recommendations are given substantial weight), customarily supervise two or more full-time employees or their equivalent, operate with limited direct oversight, and make significant decisions that impact the business.
2. Administrative: Employees in this category handle office or other nonmanual administrative tasks that are directly connected to managing or operating the business, or supporting the administrative functions of a school system. They routinely exercise significant independent judgment and often serve in roles such as finance, marketing, or human resources managers.
3. Professional: This exemption applies to employees whose work requires consistent independent judgment and discretion, and whose duties are primarily intellectual and varied in nature — work that cannot be easily measured or standardized by output within a set period. These employees fall into one of three categories – learned professionals, creative professionals, or teachers.

Learned professionals are those whose primary duty requires advanced, specialized knowledge in a field of science or learning — knowledge typically gained through extensive, specialized education, such as a master’s or doctorate degree, rather than general schooling, apprenticeships, or routine on-the-job training.

Creative professionals do work that is original and creative in nature, performed within a recognized artistic field, and that relies primarily on the employee’s own invention, imagination, or talent.

Teachers are employees whose primary duty is teaching, tutoring, instructing, or lecturing — essentially, imparting knowledge — and who are employed and actively engaged in these activities within the school system or educational institution that employs them.

Salary basis

Exempt employees must meet at least one of the duties tests and generally be paid a predetermined salary on a salary basis. A salary is a fixed amount paid for a period of at least one week and does not include board or lodging. Under the FLSA, the minimum salary for exemption is $684 per week, or $35,568 annually, with up to 10 percent of this amount allowed from nondiscretionary bonuses, incentives, or commissions. Under Oregon law, an employee’s weekly salary must equal a monthly salary calculated by multiplying the applicable regional minimum wage by 2,080 hours and dividing by 12 months.

Notably, Washington’s minimum salary requirements are higher. The 2025 minimum salary requirement for employers with 1–50 employees is $1,332.80 per week ($69,305.60 annually), and for employers with 51 or more employees, the number increases to $1,449.40 per week ($77,968.80 annually).

Being paid on a salary basis means the amount is generally not reduced based on the quality or quantity of work performed, so employees receive their full salary for any week in which they work, regardless of hours or days worked. Certain exceptions apply, such as when an employee is absent for one or more full days for personal reasons or for sickness or disability if the deduction is made pursuant to a bona fide plan or policy.

Remember, the default is that an employee is nonexempt unless the employer can establish that the employee meets both parts of the exemption test. Misclassifying employees can lead to unpaid overtime, minimum wage violations, and state or federal penalties. While it can be tempting to label employees as exempt for convenience — predictable pay and less time tracking — employers are still responsible for following wage and hour laws. Giving someone a management title or paying a salary does not automatically make them exempt; the employee’s duties and salary must meet the specific criteria for executive, administrative, or professional exemptions.

By taking the time to classify employees correctly, an employer will be in better position to avoid legal problems and ensure compliance with both federal and Oregon wage and hour laws. Such action protects the business and the people who work for it.

Abby Fitts is an attorney at Barran Liebman LLP. She advises employers regarding a full range of employment matters, including handbooks and policies. Contact her at 503-276-2190 or afitts@barran.com.

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��Ƶ guarantees the accuracy or completeness of any information published herein.

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The “Employment Eligibility Verification” form, commonly known as Form I-9, is the federal government’s official mechanism to verify an employee’s identity and authorization to work in the United States. Strict rules govern the completion and accuracy of I-9, and failure to follow them can place an employer in a difficult position. Here are some key points to keep in mind when completing I-9:

• Complete I-9 within three business days of an employee beginning work.
• Section 1 is completed by the employee. If the employee requires assistance filling out this section, the individual providing help must complete the Preparer/Translator Supplement and attach it to I-9. For employers not enrolled in E-Verify, the employee may choose to provide their Social Security number (SSN) or leave that field blank. Employers should also keep in mind that requiring specific documents containing an employee’s SSN may constitute unlawful discrimination under federal law.
• Section 2 is completed by the employer. The employee must present document(s) from the List of Acceptable Documents — and importantly, the employee, not the employer, chooses which documents to provide. Once the documents are presented, the employer must verify that they comply with the List of Acceptable Documents. An employee may present one document from List A, or one document each from List B and List C. When reviewing these documents, employers should ask themselves four key questions:

1. Is the document listed on the List of Acceptable Documents, and does it comply with the required combination?
2. Is the document current and unexpired?
3. Does the document reasonably appear to be genuine?
4. Does the document reasonably relate to the person presenting it?

If the employer can answer “yes” to all four questions, their verification responsibility under Section 2 is complete.

When should an employer reverify?
Employers should never reverify the employment eligibility of U.S. citizens or noncitizen nationals, and do not need to reverify upon the expiration of a U.S. passport, U.S. passport card, Permanent Resident Card (“green card”), or any List B identity document. Reverification applies only to employees with temporary work authorization and must be completed no later than the expiration date of the employee’s employment authorization or documentation — unless the employee’s work authorization has been automatically extended under specific federal rules. Reverification is completed on Supplement B of Form I-9.

Notice of inspection

The Department of Homeland Security’s U.S. Citizenship and Immigration Services (USCIS) is authorized to audit an employer’s Form I-9 records at any time.

In Oregon, employers that receive a Notice of Inspection from USCIS must notify their employees within three business days, making a reasonable effort to inform every employee — though doing so as soon as possible is best practice. As part of the inspection, agents will identify the scope of the audit, which generally includes all current employees and former employees whose I-9 records must still be retained. Employers are required to maintain each employee’s I-9 for at least three years after the date of hire or one year after the date employment ends, whichever is later.

If USCIS identifies compliance issues, employers are typically given 10 business days to correct them. However, substantive violations or evidence of knowing employment of unauthorized workers can result in monetary fines or more severe penalties. Accordingly, it is critical that employers maintain accurate, up-to-date I-9 records and routinely review their compliance practices.

The value of an internal Form I-9 audit

There is a long list of things most employers would rather do than dig into the “I-9 folder” for an internal audit. The process can be tedious, confusing, and downright frustrating. However, conducting an internal I-9 audit is one of the best ways to prepare for — and protect against — a real USCIS inspection. It allows an employer to identify and correct issues before they become liabilities and demonstrates to investigators a good faith effort to comply with the law despite the complexity of the requirements. Here are some practical tips to help minimize the frustration and make an audit process more efficient:

When conducting an audit, employers can either review all I-9 forms or conduct a sampling of forms. If opting for a sample review, ensure that the selection process is nondiscriminatory — do not single out employees by national origin, name, citizenship status, or any other identifying characteristic. The goal is to ensure consistency and fairness across the workplace.

Be transparent with employees and explain the scope of the audit and the reason for the audit.

If there is a deficiency in Section 1, notify the employee in private and have the person correct the deficiency.

The employer will correct any deficiency discovered in Section 2.

Corrections can be made by drawing a line through the incorrect information, entering the correct/missing information, and initialing/dating the correction or missing information. Attach a written explanation for why information was missing or needed correction. Do not backdate forms.

While I-9 compliance can feel burdensome, a committed and thoughtful internal audit process can transform it into a proactive safeguard and give employers a certain peace of mind in the face of potential challenges and inspections.

Abby Fitts is an attorney at Barran Liebman LLP. She advises employers regarding a full range of employment matters, including handbooks and policies. Contact her at 503-276-2190 or afitts@barran.com.

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��Ƶ guarantees the accuracy or completeness of any information published herein.

The post Form I-9 made easy: compliance, audits and best practices | Opinion appeared first on Daily Journal of Commerce.