• Employers Finally Get a "Break" on Wage Liability
  • June 11, 2008 | Authors: Naomi Levelle-Haslitt; Michael Porter
  • Law Firm: Miller Nash LLP - Portland Office
  • On May 15, 2008, the Oregon Supreme Court ruled that employees cannot recover from an employer additional wages based on missed rest breaks.

    Under Oregon wage-and-hour regulations, nonexempt employees are generally entitled to an uninterrupted ten-minute rest break for every four-hour segment of work, or major portion thereof. The plaintiffs in Gafur v. Legacy Good Samaritan Hosp., No. S055175 (Or May 15, 2008), alleged that they did not receive their rest breaks and that they were entitled to wages as a result. In an earlier decision, the court of appeals had ruled in favor of the plaintiffs, permitting an employee to bring a lawsuit for unpaid wages if the employee missed any rest breaks. Gafur v. Legacy Good Samaritan Hosp., 213 Or App 343, 347, 161 P3d 319 (2007).

    The supreme court examined the regulations that the plaintiffs claimed created an entitlement to wages for rest-break violations and found that the language in the rule prohibiting "deduction from [an] employee's pay" for rest breaks did not require additional wages for missed rest breaks. The court reasoned that under the regulation and related statutes, because an employee who takes a rest break is still "working" during that ten-minute period, employees who miss rest breaks are not actually paid less wages than those to which they were already entitled:

    "[A]n employee who takes a rest break does not stop working for wage and hour purposes. It follows that an employee who works four hours and takes a 10 minute rest break within that four-hour period 'works' the same amount of time * * * as an employee who works for four hours and does not take a rest break. In each circumstance, the employee is entitled to four hours pay and no more."

    This ruling is good news for employers with employees in Oregon. Class-action lawyers have been trying to use the court of appeals' ruling to make big cases out of rest-period violations, using class actions as a tool for leverage. Also, this ruling means that employers will not be subject to the penalty, potentially equal to 30 days of wages, for a plaintiff asserting an unpaid wages lawsuit based on a missed rest period.

    Oregon employers that also have employees in California or Washington should remember that state wage-and-hour law on rest breaks is different in those states. For example, Washington employers that fail to give rest breaks to non-exempt employees may be liable for paying their employees a second time for any missed rest breaks, even though the employees have already been paid for the rest break time. Employers have had to defend class actions based on missed work breaks filed in both Washington and California under the respective wage-and-hour laws of those two states.

    Although Oregon employees cannot bring a lawsuit against an employer for missed rest breaks, BOLI can still assess penalties against employers that willfully violate the regulations requiring rest breaks. To avoid violating rest-break rules, employers should:

    • Ensure that rest-break policies accurately track the regulations.
    • Ensure that employees are taking rest breaks.
    • Keep records reflecting employees' rest breaks.
    • Be aware that application of the rest-break regulations can be nuanced, and therefore, carefully examine how rest breaks are provided and tracked.
    • Consider engaging in a wage-and-hour practices review to limit exposure to BOLI complaints for missed rest breaks and exposure to other wage-and-hour claims.