“But Abby, we already have equal pay in Oregon!”
I have heard this frustrated exclamation from many a client recently. And they’re kind of right. Here in Oregon, we have not one, but TWO pay equity laws already in effect: Oregon’s equal pay law has been on the books since the 1980’s, and the federal Equal Pay Act was passed in the early 1960’s. So what could the ruckus be about? We already have equal pay in Oregon!
Not quite. In fact, Oregon’s 2017 Pay Equity Act is the most comprehensive equal pay law in the nation, and most of the provisions go into effect on January 1. Here’s a quick recap of what we are looking at:
Past Salary History: this prohibition became effective in October 2017, and made it illegal for an employer (and a manager) to ask prospective employees about prior salary or pay earnings on a job application or – in any other type of scenario that may be perceived as a preliminary interview. Casual conversation over cocktails? Getting the families together for an informal meet & greet at a pizza place before he/she is hired? No no.
- Equal Pay: This new law significantly expands the protected class coverage. Employers are prohibited from paying wages and other kinds of compensation to any employee at a higher rate than the wages you would pay to another employee of a protected class for work of a “comparable character.” Now, instead of looking only at the differential in pay by gender, Oregon employers need to know that this new law covers ten additional protected classes:
- Sexual orientation
- National origin;
- Marital status
- Veteran status;
- Disability; and
Damages: Employees who win lawsuits under this new law may be eligible for unpaid wages and all sorts of damage awards, including liquidated damages, compensatory damages, punitive damages, and attorneys’ fees and costs. There seems to be greater financial incentive for employees to sue employers than ever before. Fortunately, the bill provides a safe harbor for employers who conduct a pay equity analysis every three years and fix the problems they find – those employers are sheltered from exposure to compensatory and punitive damages. Bonus: consult with your attorney, and the investigation is privileged.
“OK, Abby. Does this mean I have to pay all my employees the same amount?” No. But this law does put an additional obligation on you to “justify” your pay differentials. Specifically, the law provides that you may pay employees for work of a comparable character at different rates if the entire wage disparity is a “bona fide factor” related to the job. Interestingly, unlike other bills that often provide a “catch all” factor, this bill does not. So, employers may only base wage disparity on the following:
- A seniority system;
- A merit system;
- Workplace locations;
- Travel (if travel is necessary and regular for the employee);
- A system like piece-rate work that measures earnings by quantity/quality;
- Experience; or
- Any combination of these factors.
There is a lot more to this bill – but I hope I’ve been able to sound the alarm and help you understand the importance of preparing now. Drop me a line if you want to chat about getting ready for January 1, 2019.