WKMCBLAW.COM Presents: Oregon Equal Pay Act of 2017 – What Employers Should Know
By Gregory A. Reinert
On June 1, 2017, Oregon Governor Kate Brown signed HB 2005. This bill, also known
as the Oregon Equal Pay Act of 2017, is intended to reduce persistent pay gaps among different
genders, races, and other protected classes. It purports to achieve that reduction through a
combination of restrictions on employers and remedies for employees. Broadly speaking, this
Act prohibits an employer from discriminating between employees on the basis of a protected
class in payment of wages or other compensation to employees of protected class for work of a
comparable character. “Protected class” is defined under the bill as, “a group of persons
distinguished by race, color, religion, sex, sexual orientation, national origin, marital status,
veteran status, disability, or age.
As noted above, employers are restricted from wage discrimination against members of
a protected class. This bill also restricts how applicants may be screened. An employer may
not screen a job applicant on the basis of current or past compensation. Nor may an employer
determine compensation for a position based on the current or past compensation of the
Employee complaints under this section may be filed with the Bureau of Labor and
Industries (BOLI) or a civil action may be filed. Employees are not necessarily required to file a
BOLI complaint before bringing a civil action. If the employee prevails in the above action, he or
she may be entitled to unpaid wages and attorney fees. There is also provision for the award
punitive damages, if the court finds the employer engaged in fraud, acted with malice or acted
with willful and wanton misconduct, or when the employer previously violated the act.
Bona Fide Wage Factors
Whereas the bill prohibits wage discrimination on the basis of class, it also sets forth a
number of factors on which an employer can justifiably set different rates of pay for work of a
comparable character. Those “bona fide” factors include: (1) a seniority system; (2) a merit
system; (3) a system that measures earnings by quality or quantity of production; (4) work place
location; (5) travel requirement; (6) education; (7) training; (8) experience; or (9) any
combination of these factors.
While this bill creates new rights and remedies for protected employees, it also contains
a provision employers may use to defend against employee claims. The so called “safe harbor”
provision allows an employer to request dismissal of an employee’s civil action by showing that
it has completed an equal pay analysis in good faith.
This bill has broad implications for employers in Oregon because it applies to any
employer with more than one employee. Due to the reach of this legislation into hiring and
compensation practices, employers should carefully consider whether they are in compliance
with the new restrictions. Enforcement of the act rolls out in phases. The restrictions on
screening applicants are effective September 9, 2017. Most provisions take effect on January
1, 2019, allowing time for employers to investigate and address existing disparities. Employers
should take steps to verify and correct any screening and salary practices that are prohibited by
the new act. Those employers with complex compliance issues might also perform an equal
pay analysis to take advantage of the “safe harbor” affirmative defense.
This advisory is a publication of Wallace, Klor, Mann, Capener & Bishop, PC. Our purpose in
publishing this advisory is to inform our clients and friends of recent legal developments. It is not
intended, nor should it be used, as a substitute for specific legal advice as legal counsel may
only be given in response to inquiries regarding particular situations.
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