2015 ORS 652.150¹
Penalty wage for failure to pay wages on termination of employment

(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 (Payment of wages on termination of employment) and 652.145 (Payment of wages for seasonal farmworkers), then, as a penalty for the nonpayment, the wages or compensation of 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 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 (Payment of wages on termination of employment) (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)(a) If the employee or a person on behalf of the employee submits 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 notice.

(b) If the employee or a person on behalf of the employee fails to submit a written notice of nonpayment, the penalty may not exceed 100 percent of the employee’s unpaid wages or compensation.

(c) A written notice of nonpayment must include the estimated amount of wages or compensation alleged to be owed or an allegation of facts sufficient to estimate the amount owed. Submission of a written notice of nonpayment that fails to include the estimated amount of wages or compensation alleged to be owed or an allegation of facts sufficient to estimate the amount owed does not satisfy the requirement for written notice under this subsection unless the employer has violated ORS 652.610 (Itemized statement of amounts and purposes of deductions), 652.640 (Itemized statement of compensation and deductions required) or 653.045 (Records to be kept by employers).

(d) 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 (Payment of wages on termination of employment).

(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 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 (Payment of wages on termination of employment) or 652.145 (Payment of wages for seasonal farmworkers) 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 described in this section by showing financial inability to pay the wages or compensation at the time the wages or compensation accrued. [Amended by 1957 c.244 §1; 1991 c.966 §2; 1995 c.501 §1; 2001 c.690 §1; 2003 c.779 §1; 2005 c.664 §2; 2011 c.348 §2]

Notes of Decisions

Employer "willfully" fails to pay wages or compensa­tion if employer is aware of and intends ac­tion, whether or not acting with malice or in bad faith. Sabin v. Willamette-W. Corp., 276 Or 1083, 557 P2d 1344 (1976)

Notwithstanding employe's initial waiver of immediate pay­ment of severance pay, employer became liable for penalty for nonpay­ment upon refusal of employe's sub­se­quent demands for immediate pay­ment. Crofoot v. Columbia-Willamette Air Pollu­tion Authority, 31 Or App 903, 571 P2d 1266 (1977)

Computa­tion of wage penalty for piecework roofing employes by determining hourly wage and assuming 8-hour day to compute employe's daily wage was proper under this sec­tion, in absence of evidence that roofers would not ordinarily work 8-hour day. Braddock v. Capfer, 284 Or 237, 586 P2d 340 (1978)

Where trial court found defendant inten­tionally did not pay plaintiff although it had ability to do so, defendant's ac­tion was "willful" within meaning of this sec­tion. Schulstad v. Hudson Oil Co., 55 Or App 323, 637 P2d 1334 (1981), Sup Ct review denied

Although evidence showed that defendant had difficulty in processing pay­ment for all plaintiff's wages on her last day of work, it supported finding that defendant's delay was "willful" within meaning of this sec­tion. Putnam v. Depart­ment of Justice, 58 Or App 111, 647 P2d 949 (1982)

Where plaintiffs instituted ac­tion to collect their com­mis­sions on the date the com­mis­sions were due, the due date and date of commence­ment of the ac­tion were the same and no penalty was assessable under this sec­tion. Reed v. Curry-Kropp-Cates, Inc., 61 Or App 520, 658 P2d 531 (1983)

Corporate of­fi­cer and shareholder who is also corporate employe may recover penalty wages under this sec­tion. Wyss v. Inskeep, 73 Or App 661, 699 P2d 1161 (1985), Sup Ct review denied

Term "willfully" as it appears in this sec­tion means that employer knew what it was doing, intended to do it, and was free agent; showing of good faith does not preclude finding of willful failure to pay. Kling v. Exxon, 74 Or App 399, 703 P2d 1021 (1985)

Plaintiff was entitled to civil penalty under this sec­tion where defendant's nonpay­ment of wages was willful and inten­tional, regardless of whether refusal to pay was based on misunderstanding. Wells v. Carson, 78 Or App 536, 717 P2d 640 (1986)

State is "employer" within meaning of this sec­tion. Pope v. Judicial Dept., 79 Or App 732, 721 P2d 462 (1986)

Where employer, after discharge of employe, failed to pay all wages owing as re­quired by ORS 652.140 (Payment of wages on termination of employment), because employe retained certain of employer's equip­ment, failure was "willful" and employe was entitled to penalty wages under this sec­tion. Emery v. Portland Typewriter & Office Machine, 86 Or App 635, 740 P2d 218 (1987)

Where parties to contract were domiciled and contracted in Oregon, contractor was licensed in Oregon and only relevant event that took place outside state was performance of labor, Oregon statute governing contracts between forestry contractors and workers is applicable to ac­tion for unpaid wages. Perez v. Coast to Coast Reforesta­tion Corp., 100 Or App 115, 785 P2d 365 (1990)

Voluntary overpay­ment at time of termina­tion does not act as credit against penalty for unpaid wages unless overpay­ment reflects intent to satisfy wage-claim obliga­tions. Stanich v. Precision Body and Paint, Inc., 151 Or App 446, 950 P2d 328 (1997)

Failure to pay wages may be done "willfully," notwithstanding subjective good-faith belief that wages are not due. Vento v. Versatile Logic Systems Corp., 167 Or App 272, 3 P3d 176 (2000)

Untimely pay­ment of wages to terminated employee does not automatically also constitute failure to pay min­i­mum wage. Hurger v. Hyatt Lake Resort, Inc., 170 Or App 320, 13 P3d 123 (2000), Sup Ct review denied

Penalty for failure to pay wages continues to accrue on nonwork days. Richardson v. Sunset Science Park Credit Union, 268 F3d 654 (9th Cir. 2001)

Where employer failed to pay overtime wages, sub­se­quent termina­tion of employ­ment did not provide basis for addi­tional claim based on nonpay­ment of same wages at termina­tion. Mathis v. Housing Authority of Umatilla County, 242 F. Supp. 2d 777 (D. Or. 2002)

Award of penalty under this sec­tion and award of liquidated damages under federal Fair Labor Standards Act does not provide double recovery, although amount of prejudg­ment interest is subject to reduc­tion for liquidated damages. Mathis v. Housing Authority of Umatilla County, 242 F. Supp. 2d 777 (D. Or. 2002)

Where same ac­tion is viola­tion of Oregon law and federal Fair Labor Standards Act, claimant may recover penalty under this sec­tion or federal Act, whichever is greater. Mathis v. Housing Authority of Umatilla County, 242 F. Supp. 2d 777 (D. Or. 2002)

Penalty for failure to pay wages and compensa­tion of "employee whose employ­ment ceases" applies for all amounts earned and unpaid, not just amount owed for final pay period. Salinas v. One Stop Detail, 194 Or App 457, 95 P3d 745 (2004), Sup Ct review denied

Employer "willfully" fails to pay wages only if employer has, or reasonably should have, full knowledge of pay­ment obliga­tion, but consciously and voluntarily decides not to fulfill obliga­tion. Wilson v. Smurfit Newsprint Corp., 197 Or App 648, 107 P3d 61 (2005), Sup Ct review denied

Where employer makes unlawful deduc­tion in viola­tion of ORS 652.610 (Itemized statement of amounts and purposes of deductions) and fails to remedy unlawful deduc­tion within statutory dead­line for pay­ment of wages under ORS 652.140 (Payment of wages on termination of employment), employer is subject to paying both penalty under ORS 652.615 (Remedy for violation of ORS 652.610) for unlawful deduc­tion and under this sec­tion for untimely pay­ment of wages. Wilson v. Smurfit Newsprint Corp., 197 Or App 648, 107 P3d 61 (2005), Sup Ct review denied

Interest at rate set in ORS 82.010 (Legal rate of interest) begins accruing on penalty wages 30 days after willful nonpay­ment occurs. Wilson v. Smurfit Newsprint Corp., 197 Or App 648, 107 P3d 61 (2005), Sup Ct review denied

Penalty wage claim for work on public contract is not claim for labor that may be recovered from surety bond. North Marion School District #15 v. Acstar Insurance Co., 205 Or App 484, 136 P3d 42 (2006), aff'd 343 Or 305, 169 P3d 1224 (2007)

Employer who does not timely pay employee's earned wages becomes liable for single penalty, and magnitude of penalty depends on dura­tion of employer's failure to pay. Russell v. U.S. Bank Na­tional Associa­tion, 246 Or App 74, 265 P3d 1 (2011)

"Wages" does not include post-judg­ment interest. Young v. State of Oregon, 246 Or App 115, 265 P3d 32 (2011), Sup Ct review denied

Notes of Decisions

Where employer was charged with crim­i­nal viola­tion of Massachusetts pay­ment of wages statute for failing to pay discharged employees for their unused vaca­tion time, employer's policy of paying discharged employees for unused vaca­tion time was not "employee welfare benefits plan" under sec­tion 3 (1) of Employee Retire­ment Income Security Act of 1974 (ERISA) and crim­i­nal ac­tion to enforce that policy is therefore not foreclosed by sec­tion 514 (a) of ERISA. Massachusetts v. Morash, 490 U.S. 107, 109 S. Ct. 1668, 104 L.Ed 98 (1989)

It is unnecessary to imply private right of ac­tion for employee against secured creditor in pos­ses­sion under ORS 652.310 (Definitions of employer and employee) to 652.405 (Disposition of wages collected by commissioner when payment cannot be made to person entitled thereto) when to do so would render pro­vi­sions of ORS 652.110 (Method of paying employees) to 652.250 (Public employee's wages as affected by absence to engage in search or rescue operation) superfluous. Stout v. Citicorp Industrial Credit, Inc., 102 Or App 637, 796 P2d 373 (1990), Sup Ct review denied


1 Legislative Counsel Committee, CHAPTER 652—Hours; Wages; Wage Claims; Records, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors652.­html (2015) (last ac­cessed Jul. 16, 2016).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2015, Chapter 652, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano652.­html (2015) (last ac­cessed Jul. 16, 2016).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.