One of your first hiring decisions is how and what to pay your employees. The start-up is understandably budget conscious and wants to control its payroll costs. So, the tendency may be to offer a “salary” wage and to interpret salary as 40+ hours a week with no eligibility for overtime. Sometimes this is the right decision. Other times it can be a violation of B.O.L.I. (Bureau of Labor and Industries) wage and hour law.

Oregon categorizes employees in two groups – Exempt or Non-Exempt. Exempt employees are “Salary” and Non-Exempt employees are “Hourly”. Exempt employees are paid a weekly wage no matter how many hours they work. Non-Exempt employees must be paid one and a half times their hourly wage for any time worked over 40 hours during the work week (usually Sunday through Saturday).

What makes an employee Exempt or Non-Exempt? Here is a simple chart to make it easier:

Screen Shot 2015-01-22 at 3.23.39 PM

It is very important to categorize your employees correctly and pay them according to B.O.L.I. wage and hour law. Violating B.O.L.I. can result in excessive fines and back pay.
If you would like to learn more about how to pay your employee and other laws that may affect your hiring and employment practices, visit the following links:

EXEMPT EMPLOYEES
http://www.oregon.gov/boli/TA/pages/t_faq_taclass.aspx

OVERTIME FOR NON-EXEMPT EMPLOYEES
http://www.oregon.gov/boli/TA/pages/t_faq_taovrtim.aspx

Written by – Heather McBride, SPHR – Human Resources Consultant at www.inclarity360.com in Eugene, Oregon

DISCLAIMER

Nothing in this blog is intended as legal advice. Any responses to specific questions are based on the facts as I understand them, and not intended to apply to any other situations. I urge you to check the applicable statutes and administrative rules yourself and to consult with legal counsel prior to taking action that may invoke employee rights or employer responsibilities or omitting to act when required by law to act.