Final paycheck timing — discharge, mutual agreement, and voluntary quit
When an employer discharges an employee or when employment is terminated by mutual agreement, all wages earned and unpaid at the time of discharge or termination become due and payable not later than the end of the first business day after the discharge or termination. When an employee quits and has given the employer not less than 48 hours' notice (excluding Saturdays, Sundays, and holidays) of the intention to quit, all wages earned and unpaid become due and payable immediately. If the employee quits without giving the 48-hour notice, wages are due and payable within five days (excluding Saturdays, Sundays, and holidays) after the employee has quit, or at the next regularly scheduled payday, whichever occurs first.
Source: Or. Rev. Stat. § 652.140
Penalty wages for late final paychecks — willfulness requirement and calculation
When an employer willfully fails to pay final wages or compensation as required by Or. Rev. Stat. § 652.140, the employer becomes liable for penalty wages under Or. Rev. Stat. § 652.150. The penalty accrues automatically by operation of law; it does not require a formal claim or BOLI determination to begin running.
Willfulness standard. "Willful" failure means the employer is aware of and intends the action of nonpayment, whether or not acting with malice or bad faith. An employer who consciously and voluntarily decides not to pay wages it knows (or reasonably should know) are due commits a willful violation. Ignorance of the statute is not a defense, but a good-faith dispute over the amount owed may negate willfulness if the employer pays the undisputed portion. Case law holds that even when an employer withholds final wages because the employee retained company equipment, the failure is still "willful" and triggers the penalty.
Penalty calculation — eight hours per day, 30-day cap. Under Or. Rev. Stat. § 652.150(1), penalty wages continue from the due date at the employee's same hourly rate for eight hours per day until the wages are paid or until a legal action is commenced, whichever occurs first. The penalty runs for every calendar day the wages remain unpaid — including Saturdays, Sundays, and holidays — regardless of whether the employee worked full-time or part-time. The maximum penalty is 30 days from the due date. For salaried employees, the hourly rate is determined by dividing total wages earned during the relevant period by the hours worked (or, under Oregon administrative rules, dividing the weekly salary by 40 hours for regular-rate purposes).
100 percent cap when written notice is sent (or omitted). Or. Rev. Stat. § 652.150(2) limits the penalty to 100 percent of the unpaid wages if the employee (or someone on the employee's behalf) sends the employer written notice of nonpayment and the employer pays the full amount within 12 days of receiving that notice. The 100 percent cap also applies if the employee fails to send written notice at all. These caps do not apply if the employer has violated Or. Rev. Stat. § 652.140 or § 652.145 one or more times in the year before the employee's employment ceased, or if the employer terminated one or more other employees on the same date. In those repeat-violation or mass-termination scenarios, the full eight-hours-per-day formula (up to 30 days) remains enforceable even after written notice.
No penalty when employer pays good-faith estimate and cures promptly. Or. Rev. Stat. § 652.150(1)(b) carves out an exception: no penalty is assessed when an employer pays the employee the wages the employer estimates are due under Or. Rev. Stat. § 652.140(2)(c) (the quit-without-notice scenario requiring time-record submission) and the estimated amount is less than the actual amount earned, provided the employer pays all remaining wages within five days after the employee submits the time records.
Financial inability defense. An employer may avoid penalty liability by proving it was financially unable to pay the wages at the time the wages accrued. However, Oregon administrative regulation OAR 839-001-0470(5) clarifies that if an employer continues to operate its business or chooses to pay certain debts and obligations in preference to the employee's wages, there is no financial inability.
Additional $1,000 BOLI civil penalty. In addition to penalty wages payable to the employee, the Commissioner of the Bureau of Labor and Industries may assess a civil penalty of up to $1,000 (payable to the state, not the employee) against any employer that willfully violates Or. Rev. Stat. § 652.140. The Commissioner may waive 50 percent of this penalty if the employer pays the full remedy (excluding the civil penalty itself) within 14 days after the order becomes final.
Statutory interest and attorney fees. Penalty wages themselves are treated as "wages" under Oregon law, and statutory interest at the rate set in Or. Rev. Stat. § 82.010 (9 percent per annum) begins accruing on penalty wages 30 days after the willful nonpayment occurs. Employees who prevail in wage-collection actions are entitled to recover reasonable attorney fees under Or. Rev. Stat. § 652.200(2), making even small-dollar claims economically feasible to pursue.
Source: Or. Rev. Stat. § 652.150 Source: Or. Bureau of Labor and Industries, Paychecks Source: OAR 839-001-0470