Includes Prohibition Against Asking for Salary History from Applicants or Employees
A new law will make it unlawful for Oregon employers to discriminate on the basis of protected class status in the payment of wages and other compensation for comparable work. The law (House Bill 2005) also will prohibit employers from paying wages or other compensation to any employee at a rate that is greater than that which the employer pays to employees of a protected class for comparable work; from screening applicants based on current or past compensation; or from determining compensation for the particular position based on the current or past compensation of an applicant for that position.
Although there is no exception for differences in compensation based on the terms of a collective bargaining agreement, the bill does allow employers to have different compensation levels if the difference is based on a bona fide factor related to the specific position and is based on:
- Seniority system
- Merit system
- System that measure earnings based on quantity or quality of production
- Workplace location(s)
- Travel, if the position necessitates regular travel
- Experience, or
- Any combination of factors if the combination of factors accounts for the entire difference in compensation
Known as the Oregon Equal Pay Act of 2017, the new law provides a more expansive definition of “protected class” and includes “a group of persons distinguished by race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age.”
Employers also will be prohibited from (a) asking current employees or applicants about salary history, and (b) asking current or former employers about an employee’s or applicant’s salary history. This provision takes effect 91 days following the end of the 2017 legislative session (approximately October 9, 2017). All other sections of the law will be effective January 1, 2019.
The Oregon Bureau of Labor and Industries (“BOLI”) will have the authority to enforce the Oregon Equal Pay Act of 2017, which contains a one year statute of limitations that begins to run each time compensation is paid based on a discriminatory decision or practice. Remedies for violations include two years of back pay, compensatory damages and punitive damages if there is clear and convincing evidence the employer engaged in fraud, acted with malice or willful and wanton misconduct, or has repeat violations. Beginning January 1, 2024, employees will have a right of private action against potential employers who have inquired about their salary history.
To encourage employers to proactively examine their pay practices prior to January 2019, the types of damages that may be awarded against an employer may be limited to back pay if the employer has conducted an equal pay act analysis and taken steps to correct pay disparities within three years prior to the date of the legal action.
It is important to note the new law does not allow employers to eliminate wage disparities by reducing an employee’s compensation.
To limit potential damage awards, employers should begin planning now to conduct an equal pay analysis with the goal of correcting any wage disparities among employees who perform work of comparable character that are not allowed by the new law.
An equal pay act analysis is time consuming and can be complex. Planning for the analysis includes choosing the appropriate personnel (which may be an independent third party) and considering the necessary data collection.
Anne Denecke is available to answer questions at 503-542-7828 regarding the Oregon Equal Pay Act of 2017.