Established processes, and frequent reviews of those processes, will put employers in prudent position with respect to Oregon's Equal Pay Act.
On June 1, 2017, Governor Kate Brown signed the Oregon Equal Pay Act of 2017 into law, broadly extending pay equity. The law expands upon current Oregon law, which already provides pay equity based on gender. The majority of the law becomes effective Jan. 1, 2019, with the salary history ban effective Oct. 9, 2017, and pushing civil actions out until Jan. 1, 2024.
What Does the Law Do?
- Extends pay discrimination to 10 protected classes — race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability and age
- Prohibits paying certain protected classes at a rate less than others for work of comparable character
- Prohibits employers from asking about an applicant's salary history, preventing a job applicant's compensation to be based on salary history (except for determining an internal transfer within the same organization)
- Permits salary differentials for employees performing work of comparable character if based on a bona factor related to the position and based on another specified reason, such as education, experience or training
What Does This Mean for Employers?
Once the enforcement provisions kick into effect, employers in violation can be found liable for unpaid wages, liquidated damages, compensatory damages, punitive damages and attorney fees. The National Law Review reports that employers do have access to a limited safe harbor — conducting a pay equity analysis within three years of any lawsuit. This analysis would allow employers to file a motion to disallow compensatory and punitive damages, but not back pay or attorney's fees. Thus, employers can't waive out of all liability.
Organizations should take steps now to prepare for the first implemented change — the salary history ban. For example, all documents and processes relating to hiring, such as job application and interviewing, should be revised. Further, employees involved in the hiring process should be trained on the new law. Begin documenting processes for pay practices and conducting regular internal pay audits. Established processes, and frequent reviews of those processes, will put employers in prudent positions with respect to Oregon's Equal Pay Act.
Stay up-to-date on the latest human capital management insights for finance leaders: subscribe to our monthly e-newsletter.
SIGN UP FOR THE BOOST NEWSLETTER