Oregon: New Oregon Equal Pay Act of 2017 Takes Aim at Pay Inequality

As part of the Act, employers are prohibited form:

1. Compensating employees at a rate greater than that of another employee of a protected class for work of “comparable character,” unless the wage differential is attributable to a bona fide factor based on:
   • A seniority system
   • A merit system
   • A system measuring earnings by quantity or quality of production
   • Workplace locations
   • Travel (if necessary and regular)
   • Education
   • Training
   • Experience
   • Any combination of these factors, if the combination of factors accounts for the entire wage differential
2. Inquiring into an applicant’s salary history from the applicant/employee or the applicant/employee’s current or prior employers, except for the purposes of verifying past compensation only, and only after extending a conditional job offer that includes the proposed amount of compensation;
3. Assessing an applicant’s compensation based on their current or past compensation; or
4. Reducing an employee’s pay in order to comply with the Act.

“Compensation” broadly includes wages, salary, bonuses, benefits, fringe benefits, and equity-based compensation.

Aggrieved employees may file a claim with the Oregon Bureau of Labor and Industries (“BOLI”), or may bring suit against an employer.  Employers may be liable unpaid wages, back pay, and compensatory and punitive damages. However, the Act provides a “safe harbor” to disallow compensatory and punitive damages in the event of a lawsuit under certain circumstances. The employer must demonstrate that it had conducted a reasonable equal pay audit in good faith within the three years prior to the complaint being filed, that the company eliminated the wage differential for the plaintiff, and that the company has made progress towards eliminating wage differentials for the protected class in question.

Additionally, employers are required to post notice of the requirements of the Act in every establishment where employees work.  The BOLI will publish a template notice that meets the posting requirements.

*IMPORTANT:  While the vast majority of the provisions of the Act are effective January 1, 2019, the prohibition of seeking prior salary history from an applicant or employee goes into effect October 6, 2017.

Action Items

1. Read the text of the Act here.
2. ManagEase can help! Contact Anabel Tarzian, Director of Client Services, at (888) 230-3231 or atarzian@managease.com to engage ManagEase’s services for compensation audits, compensation structuring, or compensation market surveys.
3. Arrange for training of staff members who make compensation-related decisions.
4. Arrange for an audit of employee job descriptions and compensation rates to confirm that they are in compliance with the new regulations.
5. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2017 ManagEase, Incorporated.