Equal Pay Act Overview

Oregon Governor Kate Brown recently signed the Oregon Equal Pay Act of 2017 into law. Although Oregon law already prohibited gender discrimination in the payment of wages (e.g. paying men more than women for comparable work), this new law prohibits discrimination in wages based on much more than just gender. Employers are now prohibited from discriminating against employees in the payment of wages based on any “protected class” including race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability, or age. The new law applies to the payment of all types of compensation including wages, salaries, bonuses, benefits, fringe benefits, and equity-based compensation for comparable work. This means that employers are now prohibited from paying employees of one religion more or less than employees of another religion for comparable work. Likewise, married employees may not be paid more or less than unmarried employees for comparable work. And, the list goes on…

There is an exception in the new Pay Equity law which allows employers to pay employees different amounts for comparable work if the wage disparity is a “bona fide factor” that is related to the job. This includes, for example, a seniority system, a merit system, workplace locations, education, training and experience, travel, or a system that measures earnings by quality or quantity of production.

The Equal Pay Act also prohibits employers from screening job applicants based on their current or past compensation or obtaining salary history information of applicants and employees.

The law requires employers to post notices in every establishment where employees work. A template notice will be provided by the Bureau of Labor and Industries (BOLI).

Most requirements of the Equal Pay Act go into effect on January 1, 2019.

Penalties

Amounts owed to employees due to unlawful pay disparities are considered unpaid wages under the Equal Pay Act. Penalties for violating the Equal Pay Act of 2017 include liability for unpaid wages, compensatory damages, punitive damages, attorneys’ fees, injunctive relief, and any other equitable relief that may be appropriate. Employers may avoid having to pay compensatory and punitive damages if they can prove that (1) the employer completed an equal pay analysis of their pay practices within three years before the date an employee files an equal pay complaint with BOLI or in court; and (2) they eliminated the wage variances for the complainant and made “reasonable and substantial progress” in eliminated the wage variances for all members of the protected class at issue.

What Employers Should Do Now

Because the new law prohibits obtaining salary history from applicants and employees, employers should review and update their job applications and interview questions so they do not ask about salary history. Interviewers should be trained on this new requirement.

Additionally, employers should conduct a pay-equity analysis to assess and correct any wage disparities among employees who perform work of comparable character. If disparities exist, they should be corrected unless the employer can show that the variances are attributable to one or more of the “bona fide factors” listed in the law. Finally, when correcting pay variances, employers should be aware that the law prohibits reducing any employee’s pay to comply with the law.