2017 Oregon Legislature Passes Pay Equity Law

The 2017 Oregon Legislature passed a landmark law to remedy pay inequity in the workplace.  It has long been illegal in Oregon to pay someone differently for “work of comparable character” because of their sex, but HB 2005 adds prohibitions on pay discrimination based on race, color, religion, sexual orientation, national origin, marital status, veteran status, age and disability.
The Bill also specifically defines “work of comparable character” to mean work that requires “substantially similar knowledge, skill, effort, responsibility and working conditions in the performance of work, regardless of job description or job title.”

Employers May Rely on Certain Factors for Differences in Pay
The Bill describes the “bona fide” factors employers may lawfully rely on for differences in pay. These factors include seniority, merit, the quantity or quality of work, workplace location, an employee’s necessary travel to work, education, training, experience or a combination of these factors accounting for the entire difference in pay. Employers should be familiar with both the potential protected classes and the bona fide factors whenever changing an employee’s pay or hiring new employees. 

The Equal Pay Defense
HB 2005 incentivizes employers to conduct an internal equal-pay analysis to assess and correct wage disparities. A court may deny a compensatory or punitive damages award to an employee if the employer can show a reasonable pay analysis was done within the past three years. The analysis must have eliminated the disparity for the employee and the employer must show it made “reasonable and substantial” progress towards eliminating disparities for the affected employee’s protected class.

Employers May No Longer Ask About Prior Compensation
The Bill also prohibits asking about or seeking the salary history of potential employees or screening potential employees based on salary history. This will require a change to most employment application forms currently being used which typically ask for past compensation details. Employers may still consider an employee’s current salary for positions with the same employer. The Bill also permits an employer to request confirmation of prior compensation after making an offer that includes proposed compensation.

Effective Dates and Posting Notice
Most provisions of the Act become effective January 1, 2019. However, the provision making it unlawful for employers to seek salary history of an applicant or employee before making an offer of employment (with proposed compensation) takes effect on October 6, 2017 – 91 days after the 2017 Legislature adjourned. The ability to file a civil lawsuit for violating this provision does not take effect until January 1, 2024.
Employers will have to post notice of the law’s requirements wherever employees work, and a template should be available from the Bureau of Labor and Industry before the Act’s effective date.

Contact Allyson Krueger or your regular Dunn Carney employment lawyer.