Chapter 664 Oregon Laws 2005

AN ACT

HB 3319

Relating to liability of employer for failure to pay certain wages; creating new provisions; and amending ORS 652.140 and 652.150.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 652.140 is amended to read:

652.140. (1) [Whenever] When an employer discharges an employee or [where such] when employment is terminated by mutual agreement, all wages earned and unpaid at the time of [such] the discharge or termination [shall] become due and payable not later than the end of the first business day after the discharge or termination.

(2)(a) When an employee who does not have a contract for a definite period quits employment, all wages earned and unpaid at the time of quitting become due and payable immediately if the employee has given to the employer not less than 48 hours’ notice, excluding Saturdays, Sundays and holidays, of intention to quit employment. [If notice is not given to the employer,]

(b) Except as provided in paragraph (c) of this subsection, if the employee has not given to the employer the notice described in paragraph (a) of this subsection, the wages [shall be] become due and payable within five days, excluding Saturdays, Sundays and holidays, after the employee has quit, or at the next regularly scheduled payday after the employee has quit, whichever event first occurs.

(c) If the employee has not given to the employer the notice described in paragraph (a) of this subsection and if the employee is regularly required to submit time records to the employer to enable the employer to determine the wages due the employee, within five days after the employee has quit the employer shall pay the employee the wages the employer estimates are due and payable. Within five days after the employee has submitted the time records, all wages earned and unpaid become due and payable.

(3) For the purpose of this section, if employment termination occurs on a Saturday, Sunday or holiday, all wages earned and unpaid shall be paid no later than the end of the first business day after the employment termination, except that if the employment is related to activities authorized under ORS chapter 565, all wages earned and unpaid shall be paid no later than the end of the second business day after the employment termination.

(4) The employer shall forward such wages by mail to any address designated by the employee if the employee requests the employer so to do. An employer may deposit such wages without discount in the employee’s account in a financial institution, as defined in ORS 706.008, in this state, provided the employee and the employer have agreed to such deposit.

(5) This section does not apply to employment for which a collective bargaining agreement otherwise provides for the payment of wages upon termination of employment.

(6) When a termination of employment results from the sale of a business or business property and the purchaser employs or continues the employment of an individual employed at the business, this section does not apply to the payment to such an individual of wages for earned but unused accrued holiday leave, sick leave, vacation leave or other leave benefits payable upon termination of employment pursuant to a collective bargaining or other employment agreement or employer policy, if the following conditions are met:

(a) On the first day of such an individual’s continued employment the purchaser of the business credits the individual with all such earned but unused accrued leave; and

(b) The leave, when used, is paid at a rate not less than the rate at which the leave was earned or, if paid at a lesser rate, the number of hours credited is increased to compensate the individual for any difference.

SECTION 2. ORS 652.150 is amended to read:

652.150. (1) Except as provided in subsections (2) and (3) of this section, if an employer willfully fails to pay any wages or compensation of any employee whose employment ceases, as provided in ORS 652.140 and 652.145, then, as a penalty for [such] the nonpayment, the wages or compensation of [such] the employee shall continue from the due date thereof at the same hourly rate for eight hours per day until paid or until action therefor is commenced. However[,]:

(a) In no case shall [such] the penalty wages or compensation continue for more than 30 days from the due date; and

(b) A penalty may not be assessed under this section when an employer pays an employee the wages the employer estimates are due and payable under ORS 652.140 (2)(c) and the estimated amount of wages paid is less than the actual amount of earned and unpaid wages, as long as the employer pays the employee all wages earned and unpaid within five days after the employee submits the time records.

(2) If the employee or a person on behalf of the employee sends a written notice of nonpayment, the penalty may not exceed 100 percent of the employee’s unpaid wages or compensation unless the employer fails to pay the full amount of the employee’s unpaid wages or compensation within 12 days after receiving the written notice. If the employee or a person on behalf of the employee fails to send the written notice, the penalty may not exceed 100 percent of the employee’s unpaid wages or compensation. For purposes of determining when an employer has paid wages or compensation under this subsection, payment occurs on the date the employer delivers the payment to the employee or sends the payment by first class mail, express mail or courier service.

(3)(a) For purposes of this section, a commission owed to an employee by a business that primarily sells motor vehicles or farm implements is not due until all of the terms and conditions of an agreement between the employer and employee concerning the method of payment of commissions are fulfilled. If no such agreement exists, the commission is due with all other earned and unpaid wages or compensation as provided in ORS 652.140.

(b) Notwithstanding subsection (2) of this section, when there is a dispute between an employer and an employee concerning the amount of commission due under paragraph (a) of this subsection, if the amount of unpaid commission is found to be less than 20 percent of the amount of unpaid commission claimed by the employee, the penalty [wage] may not exceed the amount of the unpaid commission or $200, whichever is greater.

(4) Subsections (2) and (3)(b) of this section do not apply when:

(a) The employer has violated ORS 652.140 or 652.145 one or more times in the year before the employee’s employment ceased; or

(b) The employer terminated one or more other employees on the same date that the employee’s employment ceased.

(5) The employer may avoid liability for the penalty [wage] described in this section by showing financial inability to pay the wages or compensation at the time the wages or compensation accrued.

SECTION 3. The amendments to ORS 652.140 and 652.150 by sections 1 and 2 of this 2005 Act apply only to employment that ceases on or after the effective date of this 2005 Act.

Approved by the Governor July 27, 2005

Filed in the office of Secretary of State July 27, 2005

Effective date January 1, 2006

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