Many of the operative provisions of Oregon’s Equal Pay Law go into effect on January 1, 2019. As of that date, it will be an unlawful employment practice for an employer to:
- Discriminate in any manner between employees on the basis of an employee’s status as a member 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 (not including a current employee of the employer during a transfer, move or hire of the employee to a new position with the same employer);
- Seek the pay history of an applicant or employee from the applicant or employee or a current or former employer of the applicant or employee before the employer makes an offer of employment to the prospective employee that includes an amount of compensation.
The law allows employers to pay employees performing comparable work at different rates provided that the difference in compensation is based on a bone fide factor that is related to the position and based on:
- A seniority system;
- A merit system;
- A system that measures earnings by quantity or quality of production, including piece-rate work;
- Workplace locations;
- Travel, if travel is necessary and regular for the employee;
- Experience; or
- Any combination of these factors, if the combination of factors accounts for the entire compensation differential.
In advance of January 2019, employers should consider analyzing current employee pay and determining if differences in pay for employees in comparable positions is supported by the factors above. Employers might also consider documenting the factors supporting each employees’ pay and retaining such documentation in employee personnel files. Where differences in rates of pay cannot be supported, or differences are related to employees’ membership in a protected class, employers should take steps to eliminate wage differentials.
This analysis will not only ensure employees are being compensated fairly, it can also provide a defense to recovery of compensatory and punitive damages if an employee makes a claim under the new law. Pursuant to the new law, a court can disallow an award of compensatory and punitive damages if an employer has, within three years before the date that the employee filed the action, performed 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.
BOLI is in the process of drafting administrative rules for the new law. We will post when the rules are published.