Oregon’s Pay Equity Act

On June 1, 2017, Governor Kate Brown signed the Pay Equity Act into law. One section of the law became effective October 6, 2017; the remainder will go into effect on January 9, 2019.

Effective October 6, 2017: Employers cannot ask a job applicant or an employee about salary history, i.e., effective October 6, 2017, it is unlawful for employers to screen a job applicant or an existing employee for a position based on current or past compensation. However, it is not unlawful to ask a prospective employee for written authorization to confirm prior compensation after the employer has made a job offer which includes a specified compensation amount .

Effective January 9, 2019: Remember, current law already prohibits employers from compensating a man and a woman a different amount for work of a comparable character. The Pay Equity Act extends this discriminatory practice to race, color, national origin, religion, sexual orientation, marital status, disability and age.

Work of “comparable character” is “work that is substantially similar based on the needs of the employer, the value of the work to the employer and the level of knowledge, composite skill, effort, responsibility and working conditions required in the performance of the work, regardless of job description or job title.”

Pay includes all compensation including wages, salary, bonuses, benefits, fringe benefits, and Equity based compensation.

However, different compensation amounts can be based on the following factors: bona fide seniority system, merit system, system measuring earnings by quantity or quality production, workplace location, travel if necessary and regular, education, training, and experience. If an employer plans to apply any of these factors, a written policy which clearly explains the same should be adopted.

The bill also requires that employers post a notice of the new requirements.

Except in limited circumstances, any employer found to have violated the Pay Equity Act is subject to the amount of the unpaid wages the employee is entitled for the one year period preceding the commencement of the action, compensatory damages, punitive damages if applicable, and attorney fees. An employer may also be liable for liquidated damages equal to the unpaid wages.

What can employers do now to be in compliance with the Pay Equity Act? Here are our suggestions:

  • Remove any questions on employment applications concerning salary history.
  • If you have a set standard of interview questions, remove any questions about salary history.
  • Employers who can show that they have completed an equal pay analysis to eliminate any wage variances may avoid having to pay compensatory and punitive damages if the analysis was completed within three years of the date the complaint was filed with BOLI or the lawsuit was filed. If you are a large corporation, suggest you conduct such an analysis to show a reasonable effort to eliminate any disparity in pay.
  • Consider adding a written policy concerning differing compensation levels, if that is applicable to your business.

Please contact Gordon L. Osaka, Attorney at Law, P.C., if you need help interpreting and/or applying this new law at your business establishment.