Oregon Proposed Equal Pay Legislation

The Oregon Senate passed a bill yesterday that addresses pay disparities between protected classes.  The Oregon Equal Pay Act of 2017 (House Bill 2005) provides that it is an unlawful employment practice to:

  • Discriminate between employees on the basis of a protected class in the payment of wages or other compensation for work of comparable character
  • Pay wages or other compensation to any employee at a rate greater than that at which the employer pays wages or other compensation to employees of a protected class for work of comparable character
  • Screen job applicants based on current or past compensation
  • Determine compensation for a position based on current or past compensation of a prospective employee.

An employer may consider the compensation of a current employee during a transfer, move or hire of the employee to a new position with the same employer.  An employer may also pay employees for work of comparable character at different compensation levels if the difference in compensation levels is based on a bona fide factor that is related to the position in question and is based on: (a) a seniority system; (b) a merit system; (c) a system that measures earnings by quantity or quality of production, including piece-rate work; (d) workplace locations; (e) travel, if travel is necessary and regular for the employee; (f) education; (g) training; (h) experience; or (i) any combination of the factors described in this subsection, if the combination of factors accounts for the entire compensation differential.

The proposed law allows employers to avoid payment of compensatory and punitive damages if the employer can show that it has completed, within three years before the date that the employee filed the action, an equal-pay analysis of the employer’s pay practices in good faith that was:

  • Reasonable in detail and in scope in light of the size of the employer; and
  • Related to the protected class asserted by the plaintiff in the action; and
  • Eliminated the wage differentials for the plaintiff and has made reasonable and substantial progress toward eliminating wage differentials for the protected class asserted by the plaintiff.

We will continue to follow the progress of this legislation.  In the interim, employers should consider their pay practices and whether there are positions or categories of positions with pay disparities that cannot be supported by the bona fide criteria suggested above.

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