Complying with Oregon’s New Equal Pay Act

On June 1, 2017, Governor Brown signed Oregon House Bill 2005, the Oregon Equal Pay Act. Most of the provisions of the law go into effect as of January 1, 2019, which gives employers ample time to prepare to comply.

The new law makes it an unlawful employment practice for employers to:

  • Discriminate in any manner between employees on the basis of a protected class in the payment of wages or other compensation 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.
  • Seek the salary history of an applicant or employee from the applicant or employee or a current or former employer of the applicant or employee.

The law does not prohibit employers from considering the compensation of a current employee during a transfer, move, or hire of the employee to a new position with the same employer. And, after an employer makes an offer of employment that includes the amount of compensation, an employer can request written authorization from a prospective employee to confirm prior compensation. The law also allows employers to pay employees differently for similar work if the difference in compensation levels is based on a bona fide factor that is related to the position 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.

Employees can seek redress for violations by filing a claim with BOLI or a lawsuit. Amounts owed to an employee because of the failure of the employer to comply with the new law are unpaid wages. The statute of limitations for equal pay claims is one year. But, for purposes of the statute of limitations, a compensation practice that is unlawful occurs each time compensation is paid pursuant to a discriminatory compensation decision or other practice.

Damages can include up to two years of back-pay plus pay for the period that the employee (or BOLI) is challenging the unlawful pay practice. In addition, punitive damages may be awarded if there is clear and convincing evidence that the employer engaged in fraud or acted with malice or willful and wanton misconduct, or the employer was previously found to have violated the statute. Employers can avoid an award of compensatory and punitive damages showing that an “Equal Pay Analysis” was performed within the three years prior to the claim. An “Equal Pay Analysis” means an “evaluation process to assess and correct wage disparities among employees who perform work of comparable character.”

Employers must also post a notice of the new law (which BOLI will make available).

To prepare to comply with the law, employers should, at a minimum:

  • Notify and train employees who conduct interviews regarding the statute’s prohibitions on questions/screening based on compensation
  • Review and update job descriptions, seniority and merit systems, and rationales for compensation of employees or categories of employees
  • Conduct an analysis of wages paid to employees with comparable jobs that is reasonable in detail and scope, looks at different protected classes, and if disparities are found, take steps to eliminate the differentials.

If you have any questions, would like additional information about the new law, would like help drafting a policy, or need advice on how to prepare your organization for compliance, please contact a member of Sussman Shank’s Employment Group.

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