What is the Oregon Equal Pay Act?
In June, Gov. Kate Brown signed the Oregon Equal Pay Act of 2017. The Oregon EPA has two primary components: (1) a prohibition on salary inquiries, and (2) a requirement to pay equal pay for positions of comparable character.
Restrictions on Compensation Inquiries
I can’t ask an applicant for his or her pay history?
That’s right! Effective October 5, 2017, employers cannot ask candidates for pay history until after they have made an offer of employment that includes the offered amount of compensation. Update your application forms to remove any inquiry into pay history.
What if the applicant volunteers his or her prior pay?
The employer won’t violate the law if the applicant volunteers prior pay information. But beginning January 1, 2019 employers will be unable to screen candidates based on compensation history or use the compensation history of candidates to determine the compensation level for a new position (unless it is an inter-company transfer). Therefore, even if the applicant volunteers his or her pay history, you will want to disregard it in setting the compensation level for the position.
Can I ask an applicant what he or she wants to be paid?
Yes. The statute does not prevent the employer from asking the applicant what salary he or she desires. However, some believe that even this question could perpetuate discrimination in pay based on a belief that women as a group may tend to ask for less money than men on average as a group. So while this question is permitted, employers will want to use the pay equity analysis discussed below to correct any disparities if they pay women less than men for comparable work.
Expanded Equal Pay Protections
What are the equal pay protections?
The Equal Pay Act expands equal pay protections to multiple protected classes—race, color, religion, sexual orientation, national origin, marital status, disability, age, gender, and veteran status. Beginning in January 2019, employers will face liability if they pay any employee a greater amount than the compensation paid to employees of a protected class who perform work of comparable character.
How do I know which jobs are of “comparable character”?
The statute 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. Note the word “and,” which implies that all of these things must align for work to be comparable.
Therefore, the company’s vice presidents need not all be paid similar salaries because the vice president of Sales and the vice president of Operations do not perform work that requires similar knowledge or skill. And within the Operations Department, only positions that are effectively duplicates are required to be paid similarly. For example, if a company has three safety officers, they would have to be paid similar compensation.
But what if one employee has more experience or better skills than another?
Even if the work is of comparable character, employers may compensate differently if the entire difference stems from variations in:
- Seniority
- Merit
- Measured productivity
- Workplace locations
- Travel
- Education
- Training
- Experience
- A combination of the above
What if one of my employees feels like I’m not paying equally?
Employees may file a complaint with the Bureau of Labor and Industries, or file a claim in court. The employee is entitled to back wages, damages for emotional distress, punitive damages, and his or her attorneys’ fees.
What can I do to avoid a lawsuit?
Perform a pay equity analysis! The Equal Pay Act encourages employers to analyze their current compensation practices and correct any inequalities that such analysis uncovers. Employers that engage in this equal pay analysis gain immunity from certain categories of damages in any equal pay lawsuits filed within three years of the equal pay analysis. In addition to performing the equal pay analysis, an employer must show that it eliminated the pay differential for the plaintiff and made substantial progress towards eliminating pay differentials for the protected class asserted by the plaintiff.
How do I conduct an equal pay analysis?
The statute only requires that the employer conduct an equal pay analysis that is reasonable given the size and complexity of the company. The employer can use the equal pay analysis as a quasi-affirmative defense to avoid compensatory and punitive damages. But the results of an equal pay analysis are not otherwise admissible evidence in court, nor can the lack of an equal pay analysis be used against an employer. However, although the analysis is not admissible, it may likely be discoverable. That means that plaintiff’s attorney will be able to review the equal pay analysis and then bring other lawsuits based on it or use it for other purposes in litigation. Therefore, we recommend that you conduct your equal pay analysis through your attorney so that it will be protected by the attorney-client privilege and not discoverable (unless you and your attorney decide to waive the privilege).
Information provided by Amanda T. Gamblin, Shareholder, Schwabe Williamson & Wyatt