This article originally appeared in the July 4, 2017, edition of the Business Tribune.
On June 1, 2017, Governor Kate Brown signed into law the Equal Pay Act of 2017 (HB 2005) (the “Act”), aimed at strengthening already-extant legal prohibitions on discriminatory pay practices. As Senator Kathleen Taylor (D) stated on the Senate floor during debate, while such discrimination was already illegal, “our legal system is not working, and we know far too many individuals are being paid less for doing the same work.” The Act extends gender-based protections in Oregon wage and hour law to all other protected classes, and imports into the wage and hour law tougher penalties found in state discrimination law. The Act also restricts screening based on an applicant’s current or former compensation, and prohibits employers from seeking such information from an applicant’s current or former employers.
Under existing wage and hour law, ORS 652.220 prohibits employers from paying an employee less than another employee of the opposite gender for work of a “comparable character” and “comparable skills” unless the differences are based upon (1) a nondiscriminatory merit or seniority system or (2) “good faith” factors other than gender. Violations expose employers to up to one year’s back pay, an award of damages equal to the same, and costs and attorney fees. Relatedly, under ORS 659A.030, discrimination in employment on the basis of race, color, religion, sex, sexual orientation, national origin, marital status, or age on any terms, conditions, or privileges of employment (including wages) constitutes an unlawful employment practice. Discriminated employees may request a jury trial and may recover up to two years’ back pay, compensatory and punitive damages, and costs and attorney fees.
Broadly speaking, the Act now combines the above-described regimes under a single umbrella covering all discriminatory wage practices. The gender-based wage and hour protections of ORS 652.220 have been extended to any group protected under ORS 659A.030, plus veterans. Further, the “good faith” factors that justify pay discrepancies under prior law have been spelled out in greater detail, including, among others, education, training, experience, and workplace location. Remedies under the wage and hour law for violations have also been expanded—a la state discrimination law–to include two years’ back pay, a jury trial, and potential compensatory and punitive damages.
The Act emerged out of a process begun in 2011, when the Commissioner of the Bureau of Labor and Industries (BOLI) directed the Oregon Council on Civil Rights to research and propose a set of formal policy recommendations to address pay inequality in Oregon. While the original version of the Act faced stiff partisan opposition in the House, an amended version that eased the timing and financial impact of the Act for businesses passed in the Senate unanimously.
To lessen the impact of potentially high damage awards (and to encourage employers to proactively address pay discrepancies), employers may now demonstrate as a pre-trial defense that they have undergone an audit of pay practices within the last three years, and are making “reasonable progress” in eliminating wage gaps. If successfully demonstrated, the aggrieved employee cannot obtain a jury trial, and the employer will not be liable for compensatory damages (e.g., for “pain and suffering”) and punitive damages, though liability for back pay and attorney fees will remain. Note that wage gaps may not be addressed under the Act by lowering the wages of an employee paid more than a similarly-situated member of a protected class.
Various portions of the Act become effective at different times. Salary history may no longer be sought as of 91 days from the adjournment of the 2017 legislative session. Causes of actions under state discrimination law based upon an employer unlawfully seeking such prior salary history may be brought starting on January 1, 2024. All other aspects of the Act become effective on January 1, 2019, giving employers time to proactively address any unlawful wage disparities. Employers are encouraged to begin an audit of pay practices as soon as practicable to aid compliance and to establish future defenses.
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