Oregon's minimum wage increase: what employers and employees need to know by July 1, 2025

As July 1, 2025, approaches, Oregon is set to implement its annual automatic minimum wage increase, bringing noteworthy changes for both employers and employees throughout the state. This increase, calculated by the Oregon Bureau of Labor and Industries (BOLI), is based on the Consumer Price Index.

Key Changes in Minimum Wage Rates:

Here's a detailed look at the new minimum wage rates effective July 1, 2025:

1. Portland Metro Area:

• New Rate: $16.30 per hour

• Covers: Multnomah County and parts of Washington and Clackamas Counties within the urban growth boundary.

2. Standard Areas:

• New Rate: $15.05 per hour

• Covers: Benton, Clatsop, Columbia, Deschutes, Hood River, Jackson, Josephine, Lane, Lincoln, Linn, Marion, Polk, Tillamook, Wasco, Yamhill, and parts of Clackamas, Multnomah, and Washington Counties outside the urban growth boundary.

3. Non-Urban Counties:

• New Rate: $14.05 per hour

• Covers: Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa, and Wheeler Counties.

What Employers Need to Do:

Employers must ensure compliance with these new wage rates. Here are steps to take:

• Evaluate Work Locations: Pay employees based on the minimum wage of the county where they perform 50% or more of their work weekly. If they don't work 50% of the time at a fixed location, use the rate of the region where work is performed. Alternatively, employers may pay employees at the highest of the regional rates applicable to the employee’s work in that pay period. 

• Update Payroll Systems: Align all payroll processing systems with the new rates to prevent errors and potential penalties.

• Display Updated Posters: Obtain and display the latest minimum wage poster, available on BOLI’s website, in all workplaces to keep employees informed.

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What Are the Potential Penalties for Non-Compliance with Minimum Wage Requirements?

Non-compliance with Oregon’s minimum wage laws can result in severe consequences, including:

• Payment of back wages and penalties to affected employees.

• Liquidated damages equal to twice the amount of unpaid wages.

• Civil fines imposed by the Oregon Bureau of Labor and Industries.

• Potential lawsuits and reputational harm to the employer.

Employers should review their employees’ salaries and wages to ensure all non-exempt employees earn at least the minimum wage based on where they work. Each year, by April 30, the Oregon Bureau of Labor & Industries (BOLI) calculates an adjustment of the standard minimum wage rate and maintains a list of applicable rates to guide employers. Additionally, BOLI provides an interactive map (BOLI : Oregon Minimum Wage : For Workers : State of Oregon) to help identify the applicable wage category for each geographic area, making it easier for employers to comply with the regional requirements.

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