Oregon Overtime Laws: Thresholds, Exemptions, and Remedies

Oregon overtime laws require most employers to pay non-exempt workers one and a half times their regular hourly rate for every hour worked beyond 40 in a single workweek. Manufacturing employees earn overtime after 10 hours in a day, agricultural workers currently hit the overtime threshold at 48 hours per week on the way to a 40-hour standard in 2027, and the state calculates the regular rate differently than federal law does. If you’ve been shorted, you can recover unpaid wages plus penalties that often exceed the original amount owed.

The 40-Hour Rule and How the Regular Rate Works

ORS 653.261 sets the baseline: time and a half for all hours past 40 in a workweek.¹ A workweek is a fixed, recurring period of 168 hours — seven consecutive 24-hour days. It can start on any day and hour, but once set, it stays put.² Employers cannot average two weeks together to erase overtime from a heavy one. A worker who logs 50 hours one week and 30 the next is owed 10 hours of overtime for that first week, period.

Where Oregon diverges from federal law is in how it defines the “regular rate.” State law computes the regular rate without commissions, overrides, spiffs, bonuses, or tips.³ The federal Fair Labor Standards Act works the opposite way: nondiscretionary bonuses must be folded into the regular rate before overtime is calculated.⁴ Because most Oregon employers are subject to both laws, they must apply whichever standard produces the higher rate for the worker. In practice, that usually means including nondiscretionary bonuses, since the federal formula pays more.

When an employee works at two or more hourly rates in the same week, the employer calculates a weighted average. Add all compensation for hours actually worked, divide by total hours, and the result is the regular rate for that week. Overtime is then paid at half that blended rate on top of straight-time pay for the hours past 40.

The regular rate can never dip below Oregon’s minimum wage, which varies by region and resets each July 1 based on the Consumer Price Index.⁵ A worker earning the standard-area minimum of $15.05 is entitled to at least $22.58 for every overtime hour.

Employers must keep payroll and time records for at least three years.⁶ When those records are missing or incomplete during a wage dispute, the employee’s reasonable estimates carry more weight.

Daily Overtime in Manufacturing

Most Oregon workers only earn overtime weekly. Manufacturing is the big exception. Under ORS 652.020, employees in mills, factories, and manufacturing establishments cannot work more than 10 hours a day without earning overtime, no matter what the weekly total looks like.⁷ An 11-hour shift on Monday means one hour of overtime, even if the rest of the week stays light.

These workers can be scheduled up to 13 hours in a 24-hour period when conditions require it, but every hour past 10 is overtime.⁸ If an employer pressures a manufacturing worker into consenting to more than 55 hours in a workweek, the Bureau of Labor and Industries can assess a $2,000 civil penalty per violation, or $3,000 if the coercion occurs during a declared undue-hardship period. Each workweek of continuing violation counts separately.⁷

Agricultural Overtime: Where the Threshold Stands Now

Oregon farmworkers had no overtime protections until House Bill 4002 created a phase-in that began in 2023.⁹ The thresholds step down in stages:

2023 through 2024: overtime after 55 hours per workweek
2025 through 2026: overtime after 48 hours per workweek
2027 onward: overtime after 40 hours per workweek

For 2026, agricultural employers must pay one and a half times the regular rate for every hour beyond 48 in a workweek.¹⁰ This is the threshold most often missed by payroll systems that weren’t updated after the law first took effect. A refundable state tax credit is available to help offset the cost for employers that keep detailed hour and overtime records.¹¹

Who Is Actually Exempt

Being paid a salary doesn’t make you exempt. The exemption applies only to employees who pass both a salary test and a duties test, and job titles mean nothing — what the employee actually does day to day determines status.

The Salary Test

An exempt employee must receive a guaranteed salary that doesn’t fluctuate based on the quality or quantity of work performed. The federal minimum for executive, administrative, and professional exemptions is $684 per week, or $35,568 per year. A planned increase was blocked in court in late 2024, so the threshold remains at that 2019 level.¹² Oregon employers subject to both state and federal law apply whichever salary floor is higher.¹³ A separate federal category for highly compensated employees sets the bar at $107,432 in total annual compensation, with a lighter duties test — though the employer still must show the employee performs at least one exempt duty.

The Duties Test

The employee’s primary duties must fit one of three categories:

Executive: the employee regularly directs the work of two or more other employees and has real authority over hiring and firing, or at least makes recommendations that carry significant weight.¹³
Administrative: office or non-manual work directly related to running the business (not production or sales work), involving regular exercise of independent judgment on significant matters.
Professional: work requiring advanced knowledge in a specialized field, typically acquired through extended formal education rather than on-the-job training.

This is where most misclassification disputes start. Calling someone an “assistant manager” while they spend 90 percent of their time stocking shelves doesn’t make them exempt. If the daily work doesn’t fit, overtime is owed regardless of salary or title.

What Counts as Hours Worked

Preparatory and concluding activities count as work time when they’re integral to the job. Putting on required safety equipment, booting up specialized machinery, completing mandatory security screenings at shift end — all compensable.¹⁴ Travel between job sites during the workday is generally paid, though a normal commute from home to a fixed workplace is not. The simplest test: if the employer requires it, it’s almost certainly work time.

Rest and meal breaks also factor into the overtime count. Every employee working a shift of six hours or more must get a 30-minute meal period free of all duties. For shifts of seven hours or less, that break must begin after the second hour and end before the fifth; for longer shifts, it must begin after the third hour and end before the sixth. If the employer doesn’t fully relieve the employee of duties during the meal break, the entire 30 minutes must be paid.¹⁵

Employers must also provide a paid 10-minute rest break for every four-hour work segment, falling roughly in the middle. Rest breaks cannot be combined with the meal period or tacked onto the start or end of the shift to shorten the workday.¹⁵ Those paid rest breaks count as hours worked for overtime purposes.

What to Do If You Weren’t Paid

Oregon gives workers more than one path to recover unpaid overtime, and the penalties stack up fast.

State Penalties

An employer that pays less than the overtime owed is liable for the unpaid wages plus civil penalty wages under ORS 652.150.¹⁶ Those penalty wages accrue at the employee’s regular rate for eight hours per day, starting from the date the wages were due, and can continue for up to 30 days.¹⁷ A worker owed $2,000 in overtime can end up collecting several thousand more in penalty wages alone. Courts can also award attorney fees to employees who prevail.

Federal Remedies

Because most Oregon employers are also covered by the FLSA, workers can bring federal claims as well. The FLSA allows recovery of unpaid overtime plus an equal amount in liquidated damages, effectively doubling the payout. Courts must award those doubled damages unless the employer proves it acted in good faith with reasonable grounds to believe it was complying with the law. The federal statute of limitations is two years, extending to three if the violation was willful.

How to File

Oregon workers can file a wage claim with the Bureau of Labor and Industries at complaints.boli.oregon.gov. For a federal claim, contact the U.S. Department of Labor’s Wage and Hour Division online or at 1-866-487-9243.¹⁸ You can pursue both at once. WHD typically contacts complainants within two business days.¹⁹

Waiting is the most common mistake. The clock runs from the date each unpaid paycheck was due, not from when you figured out something was wrong. Gather pay stubs, time records, and any written communications about your schedule before you file.

1
Oregon Public Law. Oregon Code 653.261 – Minimum Employment Conditions; Overtime; Rules; Meal Periods; Exemptions; Penalty
2
Oregon Public Law. OAR 839-001-0100 – Definitions for Regulations Pertaining to Maximum Hours of Work in Certain Industries
3
Oregon Public Law. OAR 839-020-0030 – Payment of Overtime Wages, Generally
4
State of Oregon. Overtime
5
State of Oregon. Oregon Minimum Wage
6
Oregon Public Law. Oregon Code 653.465 – Record Retention Requirements
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Oregon Public Law. Oregon Code 652.020 – Maximum Working Hours in Certain Industries
8
State of Oregon. Manufacturing and Canneries
9
Oregon State Legislature. Oregon House Bill 4002 – Relating to Overtime for Agricultural Workers
10
State of Oregon. Minimum Wage and Overtime in Agriculture
11
Oregon Department of Revenue. Agricultural Employer Overtime Tax Credit
12
U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption
13
State of Oregon. Salaried Exempt Employees – The White Collar Exemptions
14
State of Oregon. Paid Time
15
Oregon Public Law. OAR 839-020-0050 – Meal and Rest Periods
16
Oregon State Legislature. Oregon Revised Statutes Chapter 653 – Minimum Wages
17
Oregon Public Law. Oregon Code 652.150 – Penalty Wage for Failure to Pay Wages on Termination of Employment
18
Worker.gov. Filing a Complaint with the U.S. Department of Labor’s Wage and Hour Division
19
U.S. Department of Labor. Fact Sheet: Visits to Employers