Fall 2007 SBH Quarterly Newsletter
PDF FormatEmployment Law Update: Oregon Courts
Claim for unpaid wages may be based on failure to provide required rest breaks.
In Gafur v. Legacy Good Samaritan Hospital, 213 Or App 303 (2007), employees brought private actions on behalf of a class of employees for the failure to receive paid breaks and unpaid lunch breaks. Employer argued that breaks were under the Bureau of Labor and Industries jurisdiction and employees could not bring a private cause of action. The Oregon Court of Appeals agreed the plaintiff had no private cause for unpaid lunch breaks. However, it disagreed regarding paid breaks. It noted that the failure to provide paid breaks was a failure to pay compensation due. Employees received four hours pay for four hours worked, while under Oregon law they were entitled to four hours pay for three hours and fifty minutes of work. This was the same as failing to pay the employees for ten minutes of each shift. The case has been sent back to the trial court to determine liability.
Board directors are employees for purposes of unemployment.
In a recent decision, Necanicum Inv. Co. v. Employment Dept, 214 Or App 385 (2007), the Oregon Court of Appeals held that corporate directors are employees and fees paid to them are subject to payroll taxes. In the case before the court, the corporation had three directors, each of whom was paid $6,000 as a director fee in 2003. The $18,000 was not reported as payroll and unemployment taxes were not paid on that sum. After a routine audit, the Oregon Employment Department assessed taxes on the sum, taking the stance that fees paid to directors are payments to employees. The Court of Appeals agreed. It examined the statutory definition of employees and found it to be broadly stated as persons receiving remuneration for services from an employer. With the payment of fees, the directors fit this definition. The court also noted several exceptions have been defined, but none applicable to directors of a corporation.
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