Oregon’s Equal Pay Act Signed Into Law

June, 2017


By Jenna Reed, General Counsel, Director of Compliance Services
Cascade Employers Association
jreed@cascadeemployers.com

Last week, Oregon Governor Kate Brown signed the Equal Pay Act of 2017 (House Bill 2005) which prohibits pay discrimination on the basis of race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age against employees for performing work that requires substantially similar knowledge, skill, effort, responsibility and working conditions.

Employers may justify different pay for comparable work if all the pay difference is based on a seniority system, merit system, a system that measures quantity or quality of work, work location, travel requirements, education, training, experience, or any combination of these factors.

The Act also prohibits employers from asking about an applicant’s current or past salary history prior to an offer of employment. After an offer of employment is made, employers may request a written authorization from the applicant to confirm their prior compensation.

Finally, employers will also be required to post notices of the requirements of the Act. The Bureau of Labor and Industries (BOLI) will make available a template that meets the notice requirements of this Act.

What employers are covered?

The Act applies to all employers. This means it applies to any person employing one or more employees in Oregon. The federal government is excluded.

When does this Act take effect?

As of January 1, 2019, employees will be able to file actions for violations for the majority of this Act. However, on September 9, 2017 BOLI will be authorized to enforce the portion of the Act that prohibits employer inquiries about an applicant’s compensation history. Employees will have a private right of action under that part of the Act on January 1, 2024.

What are the penalties?

They’re significant. Employees will have a right to file a private action or with BOLI. The Act also allows class action claims. Prevailing employees can be awarded up to two years of back pay, attorney fees, and compensatory and punitive damages. An employer can avoid compensatory and punitive damages by demonstrating a reasonable equal-pay analysis was completed within three years of the date the employee filed the action, it eliminated pay differentials for the employee filing the claim and it has made substantial progress in eliminating pay differentials for the protected classes asserted by the employee.

What should you be doing now?

Remove any salary or wage inquiries from your application before September 9, 2017. Train everyone involved in the hiring and interviewing process that such inquiries will no longer be allowed. However, there is nothing in the Act that prohibits asking about an applicant’s target compensation range or desired salary. Be specific that you do not want them to disclose their current or past compensation.

Invest in developing a formal compensation structure if you have not done so already. The formal structure should include an evaluation of the jobs within the organization based on current and up-to-date job descriptions, and pay ranges should be developed based on these evaluations for determining “work of a comparable nature.” Not only should base pay be evaluated, but bonuses and all benefits (including vacation, PTO, bonuses etc.), should be evaluated to assess total compensation practices for all employees.

It would be prudent to have a formal compensation philosophy developed as well as a detailed compensation strategy in place. The strategy should be comprised of the formal practices that exist regarding how and when pay decisions are made and should include clear and concise statements regarding fair and equitable pay practices, as well as the relative degree of competitiveness within the market place. At a minimum employers should be conducting an equal pay analysis every three years in order to try to avoid compensatory and punitive damages should a claim be filed.

Cascade will continue to keep you apprised as more of this unfolds and what it could mean for you. Of course, please do not hesitate to contact us with any questions or concerns.

 

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