Understanding Oregon's Pay Equity Law and Why Pay Equity Analysis Matters

Oregon’s Pay Equity Law is all about making sure employees are paid fairly for the work they do. It’s designed to eliminate wage gaps and ensure compensation practices are transparent and equitable. This law prohibits employers from paying people differently based on their protected class if they’re doing work of comparable character. It also prevents employers from basing compensation decisions on someone’s current or past salary and bars them from asking applicants, employees, or their past employers about salary history.

Protected classes under the law include race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability, and age. Compensation encompasses more than just wages, it also includes bonuses, benefits, fringe benefits, and equity-based compensation. Work of comparable character refers to roles requiring similar knowledge, skills, effort, responsibility, and working conditions. For example, knowledge includes certifications, licenses, education, and training. Skills might involve creativity, efficiency, or precision, while effort accounts for the mental or physical energy needed to perform the job. Responsibility relates to accountability, decision-making, and supervisory duties, and working conditions include the environment, hours, and potential hazards.

Employers can justify pay differences if they’re based on valid reasons like seniority, merit, productivity, location, travel, education, training, or experience. Any combination of these factors is acceptable if the differences are consistent and verifiable. Key dates for compliance include October 6, 2017, when employers were prohibited from asking about salary history, and January 1, 2019, when protections against pay discrimination became enforceable. As of January 1, 2024, employees can file civil suits for salary history inquiries or bring class-action lawsuits.

Conducting a pay equity analysis is essential for identifying and addressing wage disparities. This process involves reviewing job descriptions to ensure accuracy, grouping similar jobs to identify roles of comparable character, analyzing compensation for discrepancies, and investigating any unexplained differences. Adjustments should be made to fix disparities that aren’t justified by the law’s allowed factors. Employers can stay ahead by performing these analyses in good faith, ensuring they are thorough, and regularly reviewing practices to eliminate wage gaps. Best practice is to conduct a thorough pay equity review once every two years. Taking these proactive steps not only helps businesses comply with the law but also demonstrates a commitment to fairness and inclusivity, which benefits both employees and the organization.

Oregon’s Pay Equity Law is a significant step toward fair pay for everyone. By understanding its requirements and conducting regular pay equity reviews, employers can foster trust, equity, and transparency in their workplaces while reducing the risk of legal issues. Fair pay isn’t just a legal obligation—it’s an essential component of a positive workplace culture. For more support check out our Oregon Equal Pay Law Factsheet or reach out to our Compensation Team.