Oregon Creates Three New Minimum Wage Rates

On March 1, 2016, Oregon Governor Kate Brown signed a law raising the state’s minimum wage. The law is an unusual one, and it will create challenges for many employers with employees in the state, particularly those with operations or employees in multiple counties.

The first increase to the state’s minimum wage will take effect on July 1, 2016, with a new increase scheduled to take effect each July thereafter. The law provides a schedule of annual increases through 2022. Beginning in 2023, the minimum wage will be adjusted annually to account for inflation.

Oregon Minimum Wage Schedule

Starting July 1, 2016, the Oregon minimum wage will be $9.75 per hour in most—but not all—of the state. The minimum wage in 18 enumerated “nonurban counties” will be $9.50 per hour.

Oregon Nonurban Minimum Wage Counties

Beginning on July 1, 2017, Oregon will have three distinct minimum wage rates: $11.25 per hour in the Portland metropolitan area; $10.00 per hour in nonurban counties; and $10.25 in the remainder of the state. Annual statutory increases will continue through July 1, 2022 when the minimum wage rates will be: $14.75 per hour in the Portland metropolitan area; $12.50 per hour in nonurban counties; and $13.50 in the remainder of the state. The rates will be adjusted each July to reflect changes in the Consumer Price Index.

Oregon Minimum Wage Counties

Although the law provides three detailed schedules of the minimum wage rates for the next seven years, it provides little guidance to employers looking to determine which of the three rates will apply when they have operations in several geographic areas or where an individual works in several different areas. While the statute provides that the applicable minimum wage rate is determined based on the county where “the employer is located,” it is not unusual for an employer to have locations in multiple counties. And it also is not unusual for employees, such as home health aides or delivery drivers, to perform work in multiple geographic areas.

The Oregon Bureau of Labor and Industries is expected to provide guidance on these and other issues.

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