Oregon’s Equal Pay Act (House Bill 2005) was recently signed into law. This new law amends the existing Oregon Equal Pay Act is intended to better address equal pay discrepancies among women, minorities, and other protected class employees.
Under the new law, it is unlawful for an employer to:
- Discriminate between employees on the basis of a protected class in the payment of wages or other compensation for work of comparable character;
- Pay wages or other compensation to any employee at a rate greater than that at which the employer pays to employees of a protected class for work of a comparable character;
- Screen job applicants based on current or past compensations; or
- Determine compensation for a position based on current or past compensation of a prospective employee.
In addition, the new law also prohibits employers from asking applicants or current employees about their salary history until after the employer makes an offer of employment to the prospective employee that includes an amount of compensation.
The Equal Pay Act defines the following key terms:
- “Protected class” means a group of persons distinguished by race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age.
- “Wages” means all compensation for performance of service by an employee for an employer, whether paid by the employer or another person, or paid in cash or any medium other than cash.
- “Working conditions” includes work environment, hours, time of day, physical surroundings and potential hazards encountered by an employee.
- “Work of comparable character” means work that requires substantially similar knowledge, skill, effort, responsibility and working conditions in the performance of work, regardless of job description or job title.
Pay Differentials Permissible Under Certain Circumstances
The new law does allow employers to pay employees for work of comparable character at different compensation levels if all of the difference in compensation levels is based on a bona fide factor that is related to the position in question and is based on:
- A seniority system;
- A merit system;
- A system that measures earnings by quantity or quality of production, including piece-rate work;
- Workplace locations;
- Travel, if travel is necessary and regular for the employee;
- Experience; or
- Any combination of the factors described in this subsection, if the combination of factors accounts for the entire compensation differential.
Employers will be required to post a notice of the Equal Pay Act’s requirements. The Bureau of Labor and Industries will be making a template available to employers which meets the statutory requirements.
Timeline for Implementation
While the new law goes into effect on September 1, 2017, only portions of the law go into effect at that time. Specifically, starting in September 2017, the employers will no longer be allowed to seek salary history from applicants or current employees.
On January 1, 2019, most of the Equal Pay Act’s provisions expanding protections go into effect. This includes requiring posted notice and making it unlawful to pay different wages, screen job applicants, or determine compensation based on an applicant’s current or past compensation.
On January 1, 2024, employees will have a right of action against employers that seek an applicant’s or current employee’s salary history.