As discussed in a previous alert, full enforcement by Oregon’s Bureau of Labor and Industries (BOLI) of Oregon’s Equal Pay Act of 2017 will begin January 1, 2019.
Last week, BOLI issued its final administrative rules for this law, which prohibits Oregon employers from paying employees who perform “work of comparable character” different pay rates because of their race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age.
“Work of comparable character” is defined by the statute as work “that requires substantially similar knowledge, skill, effort, responsibility and working conditions in the performance of work, regardless of job description or job title.” The rules provide additional information about each of those terms.
For example, “effort” can include the amount of physical or mental exertion needed; the amount of sustained activity; and the complexity of job tasks performed.
The statute allows for different pay for “work of comparable character” if the pay rates are based on one or more of the following factors: seniority, merit, education, workplace location, travel requirements, training, and experience. In addition, a pay system that measures earnings by the quantity or quality of work, such as piece-rate work, is allowed.
Here, too, the rules provide some clarification. For example, the rules state that a merit system is a system that provides “for variations in pay based upon employee performance as measured through job related criteria, for example, a written performance evaluation plan or policy that measures employee performance using a set numerical or other established rating scale, such as from “unsatisfactory” to “exceeds expectations,” and takes employees’ ratings into account in determining employee pay rates.”
Employers are not allowed to reduce the compensation of any employee in order to comply with the law. The rules clarify that “red circling, freezing or otherwise holding an employee’s compensation constant as other employees come into alignment are not considered reductions in the compensation level for the employee whose compensation is being held constant.”
The pay parity law also prohibits employers from seeking the pay history of an applicant or employee (whether from the applicant/employee or from a current or former employer of the applicant/employee) before the employer makes an offer of employment to the prospective employee that includes an amount of compensation.
The rules make clear that employers may not use any information about an applicant’s past compensation – regardless of how that information was obtained – when screening applicants or when determining compensation for a position.
According to the new rules, an employer who receives that information without soliciting it will not be considered to be in violation of the law, provided that the employer doesn’t consider that information when making its hiring decisions.
Employers will be required to post notices about this new law. The Bureau of Labor and Industries (BOLI) has made a template available to employers. ]
An employee who brings a successful claim under this new law could be awarded two years’ back pay, compensatory damages, punitive damages, and attorneys’ fees.
The law expressly permits employees to bring claims not only on their own behalf, but on behalf of a class of similarly situated employees.
An employer can avoid paying punitive and compensatory damages if it can prove that in the three years before an employee’s complaint is filed, the employer (a) completed an appropriate equal pay analysis (as described in the statute), (b) eliminated wage disparities for the complaining employee and (c) made reasonable and substantial progress toward eliminating wage disparities for the protected class.
It would, therefore, be a good idea for all employers to conduct such an analysis before January 1, 2019. In addition, employers should update their job application forms to remove any questions about compensation history and, if necessary, revise their employee handbooks to comply with the new law.
Similar laws have been enacted in Washington, California, New York, Massachusetts, New Jersey and Maryland, as well as a number of cities.
Please feel free to contact us if you have any questions about this law or any other employment-law issues.
Photo by Adeolu Eletu on Unsplash.jpg
