Oregon Enacts New Equal Pay Law that Includes Salary History Inquiry Restrictions

by Littler
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On June 1, 2017, Oregon Governor Kate Brown signed into law H.B. 2005, also known as the Oregon Equal Pay Act of 2017.  This law includes restrictions on salary history inquiries, expands existing remedies available to employees, and provides a safe harbor for employers that have voluntarily assessed their pay practices to identify and eliminate discriminatory pay practices. The Oregon Equal Pay Act garnered significant bipartisan support, unanimously passing in the Oregon Senate before being unanimously re-passed, with Senate amendments, by the House.

The new law expands upon existing federal and Oregon law, which already provide protections for certain classes of individuals with regard to pay equality.  The Oregon Equal Pay Act aims to reduce persistent pay gaps between genders, races, and those in other protected classes by encouraging employers to proactively assess their pay practices. Specifically, provisions in existing law requiring equal pay between “the sexes” was replaced with broader language offering protections to “protected classes."

Under the Oregon Equal Pay Act, employers cannot “in any manner discriminate between employees on the basis of a protected class in the payment of wages or other compensation for work of comparable character.”  This includes paying “wages or other compensation to any employee at a rate greater than that at which the employer pays wages or other compensation to employees of a protected class for work of comparable character.”  Key provisions employers should be mindful of include:

  • Employers may not ask an applicant how much s/he is currently paid;
  • Employers may not base a new hire’s pay on that individual’s current or past compensation; and
  • Employers may not comply with the Equal Pay Act by cutting a current employee’s pay.

However, employers may pay employees for work of comparable character at different compensation levels if the difference is due to a bona fide factor related to the position based on: (1) a seniority system; (2) a merit system; (3) a system measuring earnings by quantity or quality of production (e.g., piece-rate work); (4) workplace locations; (5) travel (if necessary and regular for employees); (6) education; (7) training; or (8) experience.

Employers that violate the Equal Pay Act may be liable to employees for unpaid wages.  Employees may seek redress by either filing a complaint with Oregon’s Bureau of Labor and Industries (“BOLI”), or by bringing a lawsuit against their employer directly.  There is no exhaustion requirement mandating the filing of a complaint with BOLI prior to bringing a lawsuit.

Compensatory and punitive damages are also available upon a showing of an employer’s fraud, malice, or willful and wanton misconduct.  However, an employer is entitled to file a motion to disallow an award of compensatory and punitive damages, which shall be granted if the employer demonstrates, by a preponderance of the evidence, that it: (1) completed, within three years before the date that the action was filed, an equal-pay analysis of the employer’s pay practices in good faith that was reasonable in detail and scope, and related to the protected class asserted by the plaintiff; and (2) eliminated the wage differentials for the plaintiff and has made reasonable and substantial progress toward eliminating wage differentials for the protected class asserted by the plaintiff.  In light of this provision, employers should consider voluntarily conducting equal-pay analyses to identify and rectify instances of pay discrimination.

The bulk of the Equal Pay Act’s provisions become operative on January 1, 2019, giving employers time to address any existing pay disparities.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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