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Final Order
Hearings Unit: Final Order

 
BEFORE THE COMMISSIONER
OF THE BUREAU OF LABOR AND INDUSTRIES
OF THE STATE OF OREGON
 
In the Matter of
BURRITO BOY, INC
Respondent.
Case Number 26-97

 
FINDINGS OF FACT
ULTIMATE FINDINGS OF FACT
CONCLUSIONS OF LAW
OPINION
ORDER
 

 
SYNOPSIS

 
Respondent willfully failed to pay wage claimant, a cook, all wages due upon termination, including overtime wages while claimant was on salary. Respondent failed to prove that claimant was an administrative employee or executive employee exempt from the requirements of the minimum wage law. The Commissioner ordered Respondent to pay wages earned and due, plus interest and civil penalty wages. ORS 652.140(1), 652.150, 653.020(3), OAR 839-20-005, 839-20- 030.
--------------------
The above-entitled contested case came on regularly for hearing before Douglas A. McKean, designated as Administrative Law Judge (ALJ) by Jack Roberts, Commissioner of the Bureau of Labor and Industries for the State of Oregon. The hearing was held on January 9, 1997, at 165 East Seventh Avenue, Eugene, Oregon.
 
The Bureau of Labor and Industries (the Agency) was represented by Alan McCullough, an employee of the Agency. Paulo Rodriguez (Claimant) was present throughout the hearing. Burrito Boy, Inc. (Respondent) was represented by Terence Hammons, Attorney at Law. John Ramirez was present throughout the hearing as Respondent´s representative.
 
The Agency called the following witnesses: Alejandra Buendia, Claimant´s former coworker; Maria Ornelas, Claimant´s former coworker; Olivia Rodriguez, Claimant´s sister-in-law; Paulo Rodriguez, Claimant; and Lynne Sheppard, Compliance Specialist in the Wage and Hour Division of the Agency.
 
Respondent called the following witnesses: Alba Batres, Respondent´s employee; Cristobal Davalos, Respondent´s employee; Celia Perry, Respondent´s former employee; Lester Perry, Respondent´s former general manager; and John Ramirez, Respondent´s manager and the husband of Respondent´s owner.
 
Administrative exhibits X-1 to X-15, Agency exhibits A-1 to A-10 and A-12, and Respondent exhibits R-1 to R-38 were offered and received into evidence. After the hearing, the ALJ requested and the Agency provided a statement of policy. Those documents were marked X-16 and X-17 and received into evidence. The record closed on March 10, 1997.
 
Jason Johnson, appointed by the forum and under proper affirmation, acted as an interpreter for Claimant and several witnesses called by the Agency and Respondent.
 
Having fully considered the entire record in this matter, I, Jack Roberts, Commissioner of the Bureau of Labor and Industries, hereby make the following Findings of Fact (Procedural and on the Merits), Ultimate Findings of Fact, Conclusions of Law, Opinion, and Order.
 
FINDINGS OF FACT -- PROCEDURAL
  1. On February 14, 1996, Claimant filed a wage claim with the Agency. He alleged that he had been employed by Respondent and that Respondent had failed to pay wages earned and due to him for the period August 1994 through December 1995.
  2. At the same time that he filed the wage claim, Claimant assigned to the Commissioner of Labor, in trust for Claimant, all wages due from Respondent.
  3. On September 9, 1996, the Agency served on Respondent an Order of Determination based upon the wage claim filed by Claimant and the Agency´s investigation. The Order of Determination alleged that Respondent owed a total of $2,491.16 in wages and $1,264.80 in civil penalty wages. The Order of Determination required that, within 20 days, Respondent either pay these sums in trust to the Agency, or request an administrative hearing and submit an answer to the charges.
  4. On September 19, 1996, Respondent, through its attorney, filed an answer to the Order of Determination and requested a contested case hearing. Respondent admitted that it employed Claimant but denied that it owed Claimant unpaid wages, and further set forth the affirmative defenses that (1) any failure to pay wages was not willful; (2) portions of the claim were barred by the statute of limitations, ORS 12.110(3); and (3) during all or portions of his employment, Claimant was an exempt employee under ORS 653.020(3).
  5. On November 13, 1996, the Hearings Unit issued a Notice of Hearing to the Respondent, the Agency, and the Claimant indicating the time and place of the hearing. Together with the Notice of Hearing, the forum sent a document entitled "Notice of Contested Case Rights and Procedures" containing the information required by ORS 183.413, and a copy of the forum´s former contested case hearings rules, OAR 839-50-000 to 839-50-420.
  6. On November 21, 1996, the Administrative Law Judge issued a discovery order directing each participant to submit a summary of the case, including a list of the witnesses to be called, and the identification and description of any physical evidence to be offered into evidence, together with a copy of any such document or evidence, according to the provisions of OAR 839-50-210(1). The Agency and Respondent each submitted a timely summary and later an addendum to its summary.
  7. On December 9, 1996, the Agency filed a motion to amend the Order of Determination. The amendments reflected an increase in the amount of wages claimed due, from $2,491.16 to $3,776.66, and an increase in penalty wages claimed due, from $1,264.80 to $1,498. The amendments resulted from a recomputation of amounts due based on records provided by the Claimant and Respondent and on the elimination of any overtime pay from the period before September 6, 1994. Respondent did not object to the amendment and the ALJ granted the motion.
  8. At the start of the hearing, Respondent´s attorney said he had reviewed the "Notice of Contested Case Rights and Procedures" and had no questions about it.
  9. Pursuant to ORS 183.415(7), the Administrative Law Judge explained the issues involved in the hearing, the matters to be proved or disproved, and the procedures governing the conduct of the hearing.
  10. Pursuant to OAR 839-050- 0400, the ALJ requested a statement of Agency policy on February 25, 1997. The Agency timely submitted this policy statement on March 10, 1997.
  11. On March 21, 1997, the Administrative Law Judge issued a Proposed Order in this matter. Included in the Proposed Order was an Exceptions Notice that allowed ten days for filing exceptions. The Hearings Unit received no exceptions.
 
  FINDINGS OF FACT -- THE MERITS
 
  1. During all times material herein, Respondent was an Oregon corporation engaged in the taco restaurant business. Respondent employed one or more persons in the State of Oregon. John Ramirez was a manager and the husband of Respondent´s owner.
  2. From around July 1994 to December 30, 1995, Respondent employed Claimant. Ramirez was Claimant´s supervisor.
  3. At different times during the wage claim period, Claimant worked at three of Respondent´s restaurants in the Eugene area: one on Broadway, one on River Road, and one on Highway 99. His primary duty was to cook. He was not in sole charge of any of the restaurants. He did not have the power to hire or fire employees, although he sometimes advised Ramirez that an employee should be fired. He did not have access to the cash register. He, like many other employees, had a key to the restaurant where he worked. He did not write the work schedule for employees. Ramirez posted a work schedule for employees. Claimant did not supervise other employees, although at times he was a lead cook and directed the newer cooks and told employees coming in on a later shift what to do. He occasionally wrote down what food needed to be ordered for the River Road and the Broadway restaurants, and then Ramirez called in the food orders.
  4. Claimant filled out a time card semimonthly. He was paid twice per month: on the fifth day of the month for the last half of the proceeding month, and on the twentieth day of the month for the first half of that month.
  5. From July to October 1994, Claimant´s rate of pay was $5.00 per hour. Except for the pay period September 1 to 15, 1994, Respondent paid Claimant during this period by check $5.00 per hour for each hour reported on the check stubs or on the checks. Claimant worked no overtime hours, that is, hours in excess of 40 hours in a work week during this period.
  6. For the pay period September 1 to 15, 1994, Claimant worked six hours each day, five days one week and five days in the next week, or 60 hours total in the two week period. Respondent paid Claimant for 54 hours at $5.00 per hour, or gross pay of $270.
  7. Occasionally, Respondent paid Claimant for overtime hours at the rate of one and one-half times his regular hourly rate of pay. For example, when Claimant´s regular pay rate was $6.00 per hour, Respondent paid him $9.00 per hour for each overtime hour worked.
  8. Around mid-October 1994, Claimant´s rate of pay increased to $6.00 per hour. During the period from mid-October 1994 to mid-April 1995, Respondent paid Claimant by check $6.00 per hour for each hour (and $9.00 per hour for each overtime hour) reported on Claimant´s time cards and on the check stubs or on the checks.
  9. For the pay period November 1 to 15, 1994, Claimant worked 87 total hours, working five days per week at eight hours per day (one day at seven hours). Respondent paid him on November 20, 1994, for 87 hours at $6.00 per hour, for gross pay of $522.
  10. For the period January 16 to 31, 1995, Claimant worked 103 total hours and seven hours of overtime. He worked as few as two hours one day and as many as 13 hours another day. Claimant´s rate of pay at that time was $6.00 per hour, and the overtime rate was $9.00 per hour. Respondent paid him $534.03 (net pay) on February 5, 1995. On the check, Ramirez wrote "103 hrs O.T. = 63.00 Gross = $639.00."
  11. For the period February 1 to 15, 1995, Claimant worked 88 total hours and eight hours of overtime. During the calendar week January 29 to February 4, 1995, Claimant worked 48 hours total, which included eight hours of overtime. Claimant´s rate of pay at that time was $6.00 per hour, and the overtime rate was $9.00 per hour. Respondent paid him $507.41 (net pay) on February 20, 1995. On the check, Ramirez wrote "96 hrs O.T. = 72.00 $600.00 Gross."
  12. For the period February 16 to 28, 1995, Claimant worked 80 total hours, with eight hours of overtime. Claimant worked six days in one week, eight hours per day, and so worked 48 hours in that week. Claimant´s rate of pay at that time was $6.00 per hour, and the overtime rate was $9.00 per hour. Respondent paid him $473.43 (net pay) on March 4, 1995. On the check, Ramirez wrote "88 hrs 72.00 O.T. Gross 552."
  13. In mid-April 1995, Respondent began paying Claimant a salary of $758.33 semimonthly.
  14. From June 1 to July 15, 1995, Claimant´s hourly rate was $7.00 per hour and the overtime rate was $10.50 per hour. During this period, Respondent paid Claimant by check $7.00 per hour for each hour worked (and $10.50 per hour for each overtime hour worked) reported on the check stubs or on the checks.
  15. From July 16 to around September 15, 1995, Respondent paid Claimant a salary of $728 semi- monthly.
  16. From September 16 to October 15, 1995, Claimant´s rate of pay is unclear. Respondent paid Claimant by check $616.89 on October 5, 1995, and $236 on October 9, 1995.
  17. From October 16 to 31, 1995, Claimant´s rate of pay was $7.00 per hour. During this period, Respondent paid Claimant by check $7.00 per hour for 64 hours reported on the check stub.
  18. From November 1 to December 31, 1995, Respondent paid Claimant a salary of $728 semimonthly.
  19. For the period November 1 to 15, 1995, Claimant worked 13 days, including six days at 10 hours per day and seven days at eight hours per day. In each of two weeks Claimant worked six days and 54 hours. His hours worked were 7:30 a.m. to 4 p.m. and 6 p.m. to 8 p.m. Total hours equaled 116. Respondent paid him $615.42 (net pay), based on the $728 semimonthly salary.
  20. Around January 1, 1996, Ramirez discharged Claimant.
  21. Civil penalty wages were computed, in accordance with ORS 652.150, as follows: $8.40 (Claimant´s regular hourly rate, based on his semimonthly salary of $728 for 40 hours worked) multiplied by 8 (hours per day) equals $67.20. This figure of $67.20 is multiplied by 30 (the maximum number of days for which civil penalty wages continued to accrue) for a total of $2,016.
  22. Claimant speaks Spanish and testified through an interpreter. Others who were present in the hearing room, such as Respondent´s representative Ramirez and an Agency compliance specialist, were bilingual. The Administrative Law Judge instructed the Agency and Respondent to object whenever they disagreed with a translation of a question put to a witness or the witness´s testimony. The translations were rarely objected to, and when there was an objection, the interpreter retranslated the question or testimony. The forum finds the interpreter´s translations accurate and reliable. With this in mind, and with an understanding of the limitations, difficulties, and inaccuracies that are associated with translations, the forum found unreliable Claimant´s testimony about his hours worked, the calendars he filled out for the Agency showing his hours worked, and the notations he made on his check stubs indicating his hours worked. His testimony that he filled out the Agency calendars from a calendar (or some other pieces of paper) he kept at home was not credible. Likewise, his testimony that he filled out two time cards each pay period, one for his regular hours and one for his overtime hours, was not corroborated and not credible. His calendars were inconsistent with the time cards he filled out and with the notations he made on his check stubs. See the discussion in the Opinion, which is incorporated herein by this reference, comparing these documents. He admitted that he was inconsistent about writing down overtime hours, but claimed that even when he did not write them down, he worked overtime hours. His memory was unreliable and his testimony was inconsistent on important information such as how many time cards he filled out each pay period. Contrary to other credible evidence in the record, he asserted he was never paid a salary and never agreed to be paid a salary. Accordingly, the forum gave little or no weight to Claimant´s testimony, except that which was corroborated by other credible evidence.
 
ULTIMATE FINDINGS OF FACT
  1. During all times material herein, Respondent was an Oregon corporation that engaged the personal services of one or more employees in the state of Oregon.
  2. Respondent employed Claimant as a cook from July 1994 to December 1995.
  3. Respondent discharged Claimant on around January 1, 1996.
  4. At the time of the discharge, Respondent owed Claimant $394, which represents $30 earned during the period September 1 to 15, 1994, and $364 earned during the period November 1 to 15, 1995.
  5. Respondent willfully failed to pay Claimant $394 in earned, due, and payable wages. Respondent has not paid Claimant the wages owed and more than 30 days have elapsed from the due date of those wages.
  6. Civil penalty wages, computed in accordance with ORS 652.150, equal $2,016.
 
CONCLUSIONS OF LAW
  1. During all times material herein, Respondent was an employer and Claimant was an employee subject to the provisions of ORS 652.110 to 652.200, 652.310 to 652.414, and 653.010 to 653.261.
  2. The Commissioner of the Bureau of Labor and Industries has jurisdiction over the subject matter and the Respondent herein. ORS 652.310 to 652.414.
  3. The actions or inactions of John Ramirez, an agent or employee of Respondent, are properly imputed to Respondent.
  4. ORS 653.261(1) provides:
  5. "The commissioner may issue rules prescribing such minimum conditions of employment, excluding minimum wages, in any occupation as may be necessary for the preservation of the health of employees. Such rules may include, but are not limited to, minimum meal periods and rest periods, and maximum hours of work, but not less than eight hours per day or 40 hours per week; however, after 40 hours of work in one week overtime may be paid, but in no case at a rate higher than one and one-half times the regular rate of pay of such employees when computed without benefit of commissions, overrides, spiffs and similar benefits."
  6. OAR 839-20-030(1) provides in part:
  7. "[A]ll work performed in excess of 40 hours per week must be paid for at the rate of not less than one and one-half times the regular rate of pay when computed without benefit of commissions, overrides, spiffs, bonuses, tips or similar benefits pursuant to ORS 653.261(1)."
  8. Respondent was obligated by law to pay Claimant one and one-half times his regular rate of pay, in this case $8.40 per hour (based on a semimonthly salary of $728 for 40 hours worked), for all hours worked in excess of 40 hours in a week. Respondent failed to so pay Claimant, in violation of OAR 839-20-030(1).
  9. ORS 652.140(1) provides:
  10. "Whenever an employer discharges an employee or where such employment is terminated by mutual agreement, all wages earned and unpaid at the time of such discharge or termination shall become due and payable not later than the end of the first business day after the discharge or termination."
  11. Respondent violated ORS 652.140(1) by failing to pay Claimant all wages earned and unpaid not later than the end of the first business day after discharging him from employment on January 1, 1996.
  12. ORS 652.150 provides:
  13. "If an employer willfully fails to pay any wages or compensation of any employee whose employment ceases, as provided in ORS 652.140 and 652.145, then, as a penalty for such nonpayment, the wages or compensation of such 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; provided, that in no case shall such wages or compensation continue for more than 30 days from the due date; and provided further, the employer may avoid liability for the penalty by showing financial inability to pay the wages or compensation at the time they accrued."
  14. Respondent is liable for a civil penalty under ORS 652.150 for willfully failing to pay all wages to Claimant when due as provided in ORS 652.140.
  15. Under the facts and circumstances of this record, and according to the law applicable to this matter, the Commissioner of the Bureau of Labor and Industries has the authority to order Respondent to pay Claimant his earned, unpaid, due, and payable wages and the civil penalty wages, plus interest on both sums until paid. ORS 652.332.
 
OPINION
  1. The Agency contends that Claimant performed work for Respondent for which he was not properly compensated. The Agency relies primarily on Claimant´s notations on his pay check stubs, on time cards he filled out, on calendar forms he filled out for the Agency, and on the testimony of Claimant and Agency compliance specialist Lynn Sheppard.
  2. Respondent contends that Claimant was properly compensated for his work and that no wages are due. It contends that Claimant performed predominantly managerial tasks at times and was, therefore, exempt from the requirements of the minimum wage law (particularly the requirements regarding overtime) because he was an "administrative employee," under ORS 653.020(3). Respondent relies primarily on its payroll checks and check stubs issued to Claimant, on Claimant´s time cards, and on the testimony of John Ramirez, Lester Perry, Celia Perry, Alba Batres, and Cristobal Davalos. Respondent challenges the credibility of Claimant´s testimony and records.
  3. Hours Worked
  4. In cases like this, the forum has long followed policies derived from Anderson v. Mt. Clemens Pottery Co., 328 US 680 (1946). See In the Matter of Mario Pedroza, 13 BOLI 220, 229 (1994). The US Supreme Court stated in Mt. Clemens Pottery that an employee has the "burden of proving that he performed work for which he was not properly compensated." In setting forth the proper standard for an employee to meet this burden, the court said this:
  5. "An employee who brings suit under 16(b) of the Act for unpaid minimum wages or unpaid overtime compensation, together with liquidated damages, has the burden of proving that he performed work for which he was not properly compensated. The remedial nature of this statute and the great public policy which it embodies, however, militate against making that burden an impossible hurdle for the employee. Due regard must be given to the fact that it is the employer who has the duty under 11(c) of the Act to keep proper records of wages, hours and other conditions and practices of employment and who is in position to know and to produce the most probative facts concerning the nature and amount of work performed. Employees seldom keep such records themselves; even if they do, the records may be and frequently are untrustworthy. It is in this setting that a proper and fair standard must be erected for the employee to meet in carrying out his burden of proof.
  6. "When the employer has kept proper and accurate records, the employee may easily discharge his burden by securing the production of those records. But where the employer´s records are inaccurate or inadequate and the employee cannot offer convincing substitutes, a more difficult problem arises. The solution, however, is not to penalize the employee by denying him any recovery on the ground that he is unable to prove the precise extent of uncompensated work. Such a result would place a premium on an employer´s failure to keep proper records in conformity with his statutory duty; it would allow the employer to keep the benefits of an employee´s labors without paying due compensation as contemplated by the Fair Labor Standards Act. In such a situation we hold that an employee has carried out his burden if he proves that he has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference. The burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee´s evidence. If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result be only approximate." 328 US at 686-88.
  7. Thus, the employee´s burden is met by proof that he has in fact performed work for which he was not properly compensated and by sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference. Id. The forum will accept an employee´s testimony as sufficient evidence where that testimony is credible. In the Matter of Sheila Wood, 5 BOLI 240, 254 (1986). Upon this showing, the burden shifts to the employer to produce evidence of the precise amount of work performed or with evidence to negate the reasonableness of the inference to be drawn from the employee´s evidence. Mt. Clemens Pottery, 328 US at 687-88. In Oregon, ORS 653.045 requires employers to maintain payroll records. See also OAR 839-20-080 to 839-20- 083. If the employer fails to produce such evidence, the forum may then award damages to the employee, even though the result is only approximate. Mt. Clemens Pottery, 328 US at 688.
   
Claimant´s Testimony and Records
 
The forum has found unreliable Claimant´s testimony about his hours worked, the calendars he filled out showing his hours worked, and the notations he made on his check stubs indicating his hours worked. However, the forum has found Claimant´s six time cards reliable. Below is a comparison of the different documents in evidence concerning each of the six pay periods covered by his time cards.
 
For the period September 1 to 15, 1994, Claimant´s time card shows 60 total hours (10 days at six hours per day). There is an unexplained "-10" written next to the 60 total hours. The time card shows him working Saturday through Wednesday, five days each week, six hours each day. His hours were from 5 to 11 p.m. Claimant´s rate of pay at that time was $5.00 per hour. His paycheck, dated September 20, 1994, is for $248.08. There is no check statement (stub) in evidence. On the check, Ramirez wrote "54 hrs Gross = 270". In comparison, Claimant´s calendar for this period shows him working Sunday through Friday, six days each week, eight hours each day, and 80 total hours.
 
For the period November 1 to 15, 1994, Claimant´s time card shows 87 total hours, with work five days per week at eight hours per day (one day at seven hours). Hours worked are from 2 to 10 or 3 to 11 p.m. Claimant´s check stub for that period, dated November 20, 1994, shows 87 hours at $6.00 per hour, for gross pay of $522. Claimant´s calendar, on the contrary, for this period shows different days off and indicates he worked nine hours each day, six days per week, Monday through Saturday, and 117 total hours.
 
For the period January 16 to 31, 1995, Claimant´s time card shows 103 total hours and seven hours of overtime. It shows that he worked as few as two hours one day and as many as 13 hours another day. Claimant´s rate of pay at that time was $6.00 per hour, and the overtime rate was $9.00 per hour. His pay check for that period, dated February 5, 1995, is for $534.03. There is no check stub in evidence. On the check, Ramirez wrote "103 hrs O.T. = 63.00 Gross = $639.00." Claimant´s calendar, on the contrary, shows eight hours per day, every day (with Sundays off), and 80 total hours in this period. It shows different days off and a different number of hours worked each day than his time card. Out of the 16 days in the pay period, Claimant´s two records agree on only four days.
 
For the period February 1 to 15, 1995, Claimant´s time card shows 88 total hours and eight hours of overtime. The actual daily hours written show only 80 hours total hours and no overtime. However, the time cards for the pay period January 16 to 31 and the pay period February 1 to 15 show that, for the calendar week January 29 to February 4, 1995, Claimant worked 48 hours total, which would include eight hours of overtime. Claimant´s rate of pay at that time was $6.00 per hour, and the overtime rate was $9.00 per hour. His pay check for that period, dated February 20, 1995, is for $507.41. There is no check stub in evidence. On the check, Ramirez wrote "96 hrs O.T. = 72.00 $600.00 Gross." Claimant´s calendar, on the other hand, shows eight hours per day for 13 of the 15 days in the period, and lists two February 11 dates. The days off and the total number of days worked on his calendar are different than those on his time card. The calendar shows 104 total hours, if eight hours are eliminated to account for the two February 11 dates.
 
For the period February 16 to 28, 1995, Claimant´s time card shows 80 total hours, with eight hours of overtime. Claimant worked six days in one week, eight hours per day, and so worked 48 hours in that week. Claimant´s rate of pay at that time was $6.00 per hour, and the overtime rate was $9.00 per hour. His pay check for that period, dated March 4, 1995, is for $473.43. There is no check stub in evidence. On the check, Ramirez wrote "88 hrs 72.00 O.T. Gross 552." Claimant´s calendar for this period is consistent with his time card. The calendar shows 88 total hours in this period.
 
For the period November 1 to 15, 1995, Claimant´s time card and his November 1995 calendar show 13 days worked, which include six days at 10 hours per day and seven days at eight hours per day. At least one week Claimant worked six days and 54 hours. His hours worked were 7:30 a.m. to 4 p.m. and 6 p.m. to 8 p.m. Total hours equal 116. The paycheck for this period shows net pay of $615.42, which is based on the $728 semimonthly salary.
 
As between Claimant´s time cards and his calendars, the forum found the time cards more reliable because they were filled out at the time Claimant worked rather than, in some cases, many months later when he filled out the Agency calendars.
 
An example of why Claimant´s calendars are unreliable is shown by his October 1995 calendar, which shows that he did not work from October 21 to 31, 1995. Between October 16 and 20, 1995, the calendar shows he worked 45 hours (five days at nine hours per day). In comparison, his check stub and check for the period October 16 to 31, 1995, show that he was paid $448 (gross) at the rate of $7.00 per hour for 64 hours. This discrepancy between Claimant´s calendar and the check stub (which paid him for more hours than he claimed on his calendar) undermines the reliability of the calendar, not the check stub.
 
Likewise, Claimant´s notations on his check stubs were inconsistent with his calendars. For example, on his check stub for the pay period just discussed, October 16 to 31, 1995, Claimant wrote "96 horas [hours]." However, his calendar for October 1995 shows just 45 hours worked in that period, and Respondent paid him for 64 hours.
 
On the check stub dated August 20, 1994, for the pay period August 1 to 15, 1994, Claimant wrote "130 horas [hours] * * * 58." He testified that the "58" represented the number of overtime hours he worked that period. However, on his calendar for the period August 1 to 15, 1994, he claimed that he worked 143 hours (13 days at 11 hours per day). Selecting the work week most favorable to Claimant (Monday through Sunday) for the purpose of computing overtime, the forum calculates a maximum of 52 overtime hours in that period. It appears to the forum that the "58" written on his check stub represents the difference between the 130 hours Claimant says he worked in the period and the 72 hours for which Respondent paid him.
 
As another example, Claimant wrote "80 horas [hours] 14" on his October 5, 1994, check stub. He testified at hearing that the "14" represented, again, his overtime hours. However, his calendar for the period September 16 to 30, 1994, shows that he worked 80 hours and no overtime. Again, contrary to Claimant´s testimony, the "14" notation on his check stub appears to be the difference between the 80 claimed hours and the 66 hours for which he was paid.
 
As a final example, on his check stub dated November 5, 1994, for the pay period October 16 to 31, 1994, Claimant wrote "117 horas [hours]." On his calendar for that period, however, he claimed that he worked just 88 hours (11 days at eight hours per day).
 
These inconsistencies between Claimant´s time cards, his calendars, and his notations on his check stubs make the calendars and notations unreliable. Because the forum has found Claimant´s testimony and this documentary evidence unreliable, there is no sufficient basis for determining whether he was improperly compensated or the amount and extent of that work as a matter of just and reasonable inference, except for those periods of time covered by the time cards. The forum will not speculate or draw inferences about wages owed based on insufficient, unreliable evidence. The forum found reliable the six semimonthly time cards in the record. This is because each time card was written by Claimant during the pay period covered by that card, Respondent did not dispute the accuracy of the cards, and, for the most part, Respondent paid Claimant in accordance with the hours recorded on the cards.
 
Therefore, the issue becomes whether those time cards prove that claimant in fact performed work for which he was improperly compen- sated and whether he has produced sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference. If so, the burden shifts to Respondent to show the precise amount of the work performed or to negate the reasonableness of the inference drawn from Claimant´s evidence.
Wages Due
 
Above, in the section of this opinion where the forum examined Claimant´s records, the comparison of Claimant´s time cards with the related pay checks or check stubs shows that Respondent paid Claimant in accordance with the hours he recorded on the time card in four of the six pay periods. Specifically, the forum found that Respondent paid Claimant in accordance with his hours worked (as recorded on his time cards) during the periods November 1 to 15, 1994; January 16 to 31, 1995; February 1 to 15, 1995; and February 16 to 28, 1995. There was a discrepancy, however, between the hours Claimant recorded on his time card and the wages Respondent paid for the periods September 1 to 15, 1994, and November 1 to 15, 1995.
 
Claimant´s time card for the period September 1 to 15, 1994, shows that he worked five days in each of two weeks, or 10 days in the period. He worked six hours each day, for a total of 60 hours worked. Claimant´s rate of pay at this time was $5.00 per hour. Respondent paid Claimant gross wages of $270 for 54 hours of work. Six hours of recorded work time are unaccounted for and unpaid for by Respondent.
 
Claimant´s time card for the period November 1 to 15, 1995, shows 116 total hours worked. There is no evidence that Respondent had an established work week -- that is, a period of seven consecutive 24 hour periods commencing on a particular day -- for purposes of computing Claimant´s overtime. If an employer has failed to establish the beginning day of the employee´s work week, the Agency´s policy is to consider the work week to begin on the day the individual employee commenced work and to end seven consecutive days after the work began, or to consider the work week to begin on Sunday and end seven consecutive days later on Saturday (in other words, the work week will be the same as a calendar week).
 
In this case, there is no evidence of the day of the week (in July 1994) Claimant commenced work. However, consistent with Agency policy, the forum considers the work week to begin on the day Claimant commenced work in the pay period in question and to end seven consecutive days later. Thus, Claimant´s work week began on November 1 and ended seven days later on November 7, 1995. Likewise, the next work week began on November 8 and ended seven days later on November 14, 1995.
 
In the work week November 1 to 7, 1995, Claimant worked a total of 54 hours, including 14 hours in excess of 40 in the work week. Likewise, in the work week November 8 to 14, 1995, Claimant worked a total of 54 hours, including 14 hours in excess of 40 in the work week. He worked eight additional hours on November 15, 1995.
 
For a nonexempt salaried employee, where there is no agreed set number of hours worked each week and where the requirements of the fluctuating work week method for payment of overtime are not satisfied (that is, where the conditions of OAR 839-20-030(3)(c) through (f) are not met), it is the Agency´s policy:
 
"to assume that the employee´s salary is intended to compensate the employee for a regular 40 hour work week. The employee´s straight time hourly rate is calculated by dividing 40 into the weekly salary. For example, if the weekly salary is $336, the employee´s straight time rate of pay would be $8.40/hr. If the employee worked 60 hours that week, wages due and owing would be computed as follows:
"40 (straight time hrs. worked) x $8.40 (straight time wage) = $336
"20 (overtime hrs. worked) x $12.60 (straight time wage x 1.5) = 252
"Total wages due and owing = $588"
 
Here, Claimant´s salary was $728 semimonthly. Pursuant to OAR 839-20-030(3)(g), this salary is translated into its work week equivalent by multiplying it by 24 (the number of semimonthly periods in the year) and dividing by 52 (the number of weeks in the year). The regular hourly rate of pay is computed by dividing the weekly wage by the number of hours the salary is intended to compensate (in this case, pursuant to Agency policy, 40 hours). Thus, $728 times 24 equals $17,472, divided by 52 equals $336. This weekly wage, $336, divided by 40 (hours) equals $8.40, the regular hourly rate of pay. The overtime rate of pay equals $8.40 times 1.5, or $12.60 per overtime hour.
 
As noted above, in the work week November 1 to 7, 1995, Claimant worked a total of 54 hours, including 14 hours in excess of 40 in the work week. In the work week November 8 to 14, 1995, Claimant again worked a total of 54 hours, including 14 hours in excess of 40 in the work week. He worked eight hours on November 15. Thus, Claimant worked 88 straight time hours and 28 overtime hours in the pay period. He earned $1,092 (88 times $8.40 equals $739.20, plus 28 times $12.60 equals $352.80). Respondent paid Claimant $728 and therefore owes him $364 for the period November 1 to 15, 1995.
 
The time cards prove that claimant in fact performed work for which he was improperly compensated. He has produced sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference. Therefore, the burden shifts to Respondent to show the precise amount of the work performed or to negate the reasonableness of the inference drawn from Claimant´s evidence.
 
Respondent has not challenged the amount of work performed as shown on Claimant´s time cards, but instead claims that Claimant was a salaried, exempt employee. Therefore, the forum turns to that issue.
   
"Administrative Employee" Exemption
 
Respondent raised the defense that the minimum wage and overtime requirements in ORS 653.010 to 653.261 do not apply to Claimant because "he was engaged in administrative work, performed predominantly managerial tasks, exercised discretion and independent judgment, and earned a salary and was paid on a salary basis." (Respondent´s answer.)
 
ORS 653.020 provides in pertinent part that:
"ORS 653.010 to 653.261 does not apply to any of the following employees:
"* * * * *
"(3) An individual engaged in administrative, executive or professional work who:
"(a) Performs predominantly intellectual, managerial or creative tasks;
"(b) Exercises discretion and independent judgment; and
"(c) Earns a salary and is paid on a salary basis."
 
The Agency has promulgated rules under ORS 653.040(3) considered necessary to carry out the purposes of ORS 653.010 to 653.261, or necessary to prevent the circumvention or evasion of ORS 653.010 to 653.261, and to safeguard the minimum wage rates set under ORS 653.010 to 653.261.
 
OAR 839-20-005 provides, in pertinent part:
 
"As used in ORS 653.010 to 653.261 and in these rules, unless the context requires otherwise:
1)" ´Executive Employee´ means any employee:
"(a) Whose primary duty consists of the management of the enterprise in which he/she is employed or of a customarily recognized department or subdivision thereof. The foregoing language of this paragraph prescribing the primary duty shall not apply in the case of an employee who is in sole charge of an independent establishment or a physically separated branch establishment or who owns at least 20 percent interest in the enterprise in which he/she is employed; and
"(b) Who customarily and regularly directs the work of two or more other employees therein; and
"(c) Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion of any other change of status of other employees will be given particular weight; and
"(d) Who customarily and regularly exercises discretionary powers; and
"(e) Who earns a salary and is paid on a salary basis pursuant to ORS 653.025 exclusive of board, lodging, or other facilities.
"(2) ´Administrative Employee´ means any employee:
"(a) Whose primary duty consists of either:
"(A) The performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his/her employer´s customers; or
"(B) The performance of functions in the administration of a school system, or educational establishment or institution, or of a department or subdivision thereof, in work directly related to the academic instruction or training carried on therein.
"(b) Who customarily and regularly exercises discretion and independent judgment; and
"(c)(A) Who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity; or
"(B) Who performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge, or;
"(C) Who executes under only general supervision special assignments and tasks; and
"(d) Who earns a salary and is paid on a salary basis pursuant to ORS 653.025 exclusive of board, lodging, or other facilities.
"* * * * *
"(5) ´Independent Judgment and Discretion´ means the selection of a course of action from a number of possible alternatives after consideration of each, made freely without direction or supervision with respect to matters of significance. It does not include skill exercised in the application of prescribed procedures."
OAR 839-20-004(22) provides:
 
" ´Primary Duty´ means, as a general rule, the major part, or over 50 percent, of an employee´s time. However, a determination of whether an employee has management as his/her primary duty must be based on all the facts of a particular case. Time alone is not the sole test and in situations where the employee does not spend over 50 percent of his/her time in managerial duties, he/she might have management as a primary duty if other pertinent factors support such a conclusion. Factors to be considered include, but are not limited to, the relative importance of the managerial duties as compared with other duties, the frequency with which the employee exercises discretionary powers the relative freedom from supervision and the relationship between the salary paid the employee and wages paid other employees for the kind of non-exempt work performed by the supervisor."
 
While Respondent specifically asserted that Claimant was exempt as an administrative employee, both Respondent and the Agency presented evidence pertinent to the requirements of an "executive employee." The forum has reviewed Claimant´s duties and the requirements of both executive and administrative employees and concludes that Claimant is not exempt from the requirements of ORS 653.010 to 653.261 as either an executive or an administrative employee. Claimant´s primary duty was to cook. He did not perform office or non-manual work directly related to management policies or the general business operations of his employer. Nor was his primary duty the management of the enterprise in which he was employed or of a customarily recognized department or subdivision thereof.
 
One factor to consider in evaluating whether management is an employee´s primary duty is the relationship between the employee´s salary and the wages paid other workers for the kind of nonexempt work performed by the employee. Claimant was paid a salary from mid-July to mid-September and during November and December 1995. The only time card in the record during those periods is that for November 1 to 15, 1995. During that 15-day period, Claimant worked 116 hours. If only straight time wages were paid for all those hours (as Respondent urges), Claimant´s salary of $728 converts to an hourly rate of only $6.28 -- less than the $7.00 per hour rate he made in October 1995 when he was not on salary. This fact weighs against a finding that Claimant was an executive employee.
 
In addition, the facts do not suggest that Claimant was in "sole charge" of any of the restaurants. Respondent´s own witness, Celia Perry, described Claimant as the head cook, or "manager" of the kitchen, while she was the "manager" of the front, that is, of the employees who took orders and used the cash register. Furthermore, executive decisions were not reserved to Claimant. Generally, Ramirez visited the restaurants daily and performed the hiring, firing, supervising, and scheduling functions.
 
Moreover, the preponderance of credible evidence does not show that Claimant customarily and regularly exercised discretion and independent judgment. Evidence that he made up of list of food to be ordered and gave directions to other cooks does not demonstrate the kind of discretion and independent judgment defined in OAR 839-20-005(5). Simply putting a head cook on salary and giving him the title of manager is not enough to make him exempt from the requirements of the minimum wage law. In the Matter of John Mathioudakis, 12 BOLI 11 (1993). Respondent has failed to prove its affirmative defense.
 
  Penalty Wages
 
Awarding penalty wages turns on the issue of willfulness. Willfulness does not imply or require blame, malice, wrong, perversion or moral delinquency, but only requires that that which is done or omitted is intentionally done with knowledge of what is being done and that the actor or omittor be a free agent. Sabin v. Willamette Western Corp., 276 Or 1083, 557 P2d 1344 (1976).
 
Respondent, as an employer, had a duty to know the amount of wages due to its employee. McGinnis v. Keen, 189 Or 445, 221 P2d 907 (1950); In the Matter of Jack Coke, 3 BOLI 238, 242 (1983). A faulty payroll system is no defense to a failure to pay wages owed and does not allow an employer´s actions to be characterized as unintentional. In the Matter of Loren Malcom, 6 BOLI 1, 10 (1986). Employers are charged with knowing the wage and hour laws governing their activities as employers. In the Matter of Country Auction, 5 BOLI 256, 267 (1989). Ignorance of the law is not relevant. In the Matter of Sheila Wood, 5 BOLI 240, 255 (1986).
 
Respondent asserted that Claimant was exempt from the requirements of the minimum wage laws. The facts and law prove otherwise. An employer´s failure to apprehend the correct application of the law and the employer´s actions based on this incorrect application do not exempt it from a determination that it willfully failed to pay overtime. In the Matter of Mario Pedroza, 13 BOLI 220, 232 (1994); In the Matter of Locating, Inc., 14 BOLI 97, 109 (1994), aff´d without opinion, Locating, Inc. v. Deforest, 139 Or App 600, 911 P2d 1289 (1996).
 
Here, evidence established that Respondent knew it was paying Claimant a salary during November 1995 and knew from Claimant´s time card that he was working over 40 hours in a week. Respondent intentionally did not pay Claimant overtime wages during this period. Evidence showed that Respondent acted voluntarily and was a free agent. Respondent must be deemed to have acted willfully under this test, and thus is liable for penalty wages under ORS 652.150.
   
Civil Penalty Calculation
 
Although Claimant earned several hourly wage rates and two different salaries during his employment with Respondent, all but $30 of the unpaid wages were earned while Claimant was on a semimonthly salary of $728. This salary was also his rate of pay when he was discharged. Where more than one wage rate is earned during a wage claim period, it is the Agency´s policy when determining the civil penalty
"to compute the average hourly wage during the wage claim period, no matter how many wage rates applied. As a starting point, only the wage rates used and wages earned during the actual wage claim period are used to determine the average hourly wage. The equation is as follows: Total earned during the wage claim period divided by the total number of hours worked during the wage claim period, multiplied by eight hours, multiplied by 30 days." (Emphasis original.) In the Matter of Mark Johnson, 15 BOLI 139, 143 (1996).
In this case, however, there is insufficient evidence to make that calculation.
 
Accordingly, the forum calculated the civil penalty based on Claimant´s final wage rate and the wage rate at which nearly all of the unpaid wages were earned -- the semimonthly salary of $728. Using the regular hourly rate calculated above for purposes of determining the overtime rate, the forum figured the civil penalty to be $2,016. See Finding of Fact 21.
 
Before hearing, the forum allowed the Agency to amend its Order of Determination to increase the penalty wages sought from $1,264 to $1,498. The Agency did not seek to again amend its pleading after the start of the hearing. OAR 839-050-0140(2). Thus, the civil penalty wages ordered below are consistent with the Agency´s pleading.
 
  ORDER
 
NOW, THEREFORE, as authorized by ORS 652.332, the Commissioner of the Bureau of Labor and Industries hereby orders BURRITO BOY, INC. to deliver to the Fiscal Services Office of the Bureau of Labor and Industries, 800 NE Oregon Street, Portland, Oregon 97232-2162, the following: A certified check payable to the Bureau of Labor and Industries IN TRUST FOR PAULO RODRIGUEZ in the amount of One Thousand Eight Hundred and Ninety Two Dollars ($1,892), less appropriate lawful deductions, representing $394 in gross earned, unpaid, due, and payable wages; and $1,498 in penalty wages; plus interest at the rate of nine percent per year on the sum of $394 from February 1, 1996, until paid and nine percent interest per year on the sum of $1,498 from March 1, 1996, until paid.