On June 1, 2017, the Governor signed into law the Oregon Equal Pay Act of 2017 (the Act), expanding the current law's protection against wage disparities among employees. Currently, Oregon prohibits discrimination "between the sexes in the payment of wages for work of comparable character, the performance of which requires comparable skills." The Act increases the law's scope to prohibit discrimination against employees on the basis of a "protected class," which is defined as, "a group of persons distinguished by race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age" in the payment of compensation (wages, salary, bonuses, benefits, fringe benefits and equity-based compensation) for work of comparable character.
The Act carves out an exception, which allows employers to have varying compensation levels as long as the disparity is "based on a bona fide factor" that is related to the position in question, which includes:
A seniority system;
A merit system;
A system that measures earnings by quality or quantity of production;
Travel (if necessary and regular for employee);
Any combination of these factors but only if that combination accounts for the entire compensation differential.
Employers who violate the Act could be held liable for unpaid wages, compensatory damages, punitive damages, and attorneys' fees. Employers may avoid having to pay compensatory or punitive damages if the employer demonstrates that it completed an equal-pay analysis of its pay practices within the three years before the date the employee filed the action, and if it eliminated the wage differentials for the plaintiff. Most provisions of the Act go into effect on January 1, 2019, which gives employers time to analyze their compensation structures and make any necessary changes.
In addition, the Act prohibits employers from seeking salary history information of an applicant or an employee. This means it will be unlawful for employers to have applications that ask applicants to disclose what they were paid at prior employment. This provision of the Act takes effect on the 91st day after the date on which the 2017 regular session of the Seventy-ninth Legislative Assembly adjourns (according to the Oregon State Legislature website's calendar, the 91st day falls on October 9, 2017), at which time the Oregon Bureau of Labor and Industries will have the authority to enforce the provision and issue civil fines. Beginning January 1, 2024, employees will have a right of private action against potential employers who have inquired about their salary history.
Next Steps Employers should review their hiring practices to ensure job applications and interviewers do not ask about an applicant's salary history.
In addition, employers should perform an equal-pay analysis to assess and correct any wage disparities among employees who perform work of comparable character that are not allowed by the statute. Employers should also be sure to document employee performance and articulate and document legitimate reasons, listed under the statute, for pay disparities.
This client update is prepared for the general information of our clients and friends. It should not be regarded as legal advice. If you have any questions regarding this update, or for more information about this topic, please an attorney in our Labor & Employment practice group, or the attorney with whom you normally consult.