Oregon Equal Pay Act Goes Into Effect in 2019. Are You Ready?

 

by Frank J. Godfrey III

On June 1, 2017, Oregon Governor Kate Brown signed the new Oregon Equal Pay Act into law. The act enjoyed unusual bipartisan support, in part because it simultaneously strengthens and clarifies employee protections while providing safe harbor to employers who can demonstrate good faith efforts to rectify pay disparities within their organization.

You wouldn’t be entirely wrong if you thought we already had the question of equal pay covered by existing laws. It is true that Oregon law already prohibited offering unequal wages for equal work based on an employee’s sex.

However, despite long-standing law in this matter, pay disparities persist to this day. Oregon women earn, on average, 53 to 83 cents to every dollar Oregon men earn, with women of color falling the furthest behind in the pay gap.

In recognizing that race and other differences can be a factor in wage discrimination, Oregon’s new law has expanded protected classes to include “a group of persons distinguished by race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age.”

In addition to expanding recognized protected classes, the act also broadens and clarifies the legal definition of compensation, previously stated as “wages” to now include “wages, salary, bonuses, benefits, fringe benefits and equity-based compensation.”

The act also introduces new rules related to hiring and promotion, including, among others:

  • An employer may not screen an applicant based on their current or past compensation
  • An employer may not lower to wages of employees to bring their overall compensation structure into compliance with the law.
  • An employer will no longer be able to ask an applicant what they are being paid at their current position or what compensation for past positions had been.

The screening and compensation provisions do not go into effect until January 1, 2019, giving employers time to review their hiring policies and wages and take the steps needed to comply with the law. The prohibition on salary inquiries will go into effect on October 6th of this year.

The law provides some protection from future legal action if you can demonstrate that you have conducted a wage audit and are a making a good faith effort to bring your business into compliance. Therefore, it is a good time now to review your hiring practices and examine your existing compensation structure.

If you have questions about how the Oregon Equal Pay Act affects your company, or want advice on how to bring your operations into compliance, it is best to seek legal counsel.