By Amy Heverly, AttorneyThis article originally appeared in the August 9, 2018 edition of the Cascade Business News.
As we celebrate the success of women in business, there is an important and sometimes uncomfortable topic that cannot be ignored: compensation. While many of us do not measure success only by compensation, the statistics about wages for women and men are troubling. According to the Oregon Center for Public Policy, women in Oregon earn $0.79 for every dollar a man makes.
The Oregon legislature passed a law in 2017—the Oregon Equal Pay Act of 2017—to address pay disparity. This article will talk about how the law works, including tips to ensure your company is complying.
The first thing to know is the Oregon Equal Pay Act does not just apply to gender-based pay disparity, but is meant to address discrimination based on gender, race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability, or age. The second thing to know is Oregon’s Equal Pay Act is looking to correct systemic and long-standing practices that reinforce pay disparity, so the new rules affect how much people are paid and how employers can use past pay to set current pay.
Starting in October 2017, it became illegal to ask job applicants about pay history or use pay history to set salaries. This is important, because if you base a person’s salary on their past salaries, then we may be perpetuating the system that keeps wages lower for women and minorities. Employers that have not done so already should stop asking questions about past pay and should review application forms they use to make sure that question is not present. This includes national companies that may have standardized forms. BOLI will start enforcing this provision January 1, 2019.
Oregon law already prohibits paying women less than men for work of comparable character. However, the Equal Pay Act of 2017 defines that in a way that may make enforcement clearer: work of comparable character means work requiring “substantially similar knowledge, skill, effort, responsibility and working conditions in the performance of work, regardless of job description or job title.”
There are reasons why employees may be paid differently, based on job-related factors including a seniority or merit system, location, education, training, experience, or a combination of those factors. However, the law does not define those terms or explain how an employer must calculate wages using those factors.
Employers should consider conducting an equal-pay analysis to assess (and correct) pay disparity. Doing so may save an employer from a future lawsuit, if unjustified pay disparity exists, and is corrected before the law goes into effect. Additionally, doing so provides a limited defense under the Equal Pay Act if an employer is sued within three years of having completed such an analysis.
If you are an employer and have not completed an equal pay analysis, there are consultants that can provide a neutral review. Employers should consider hiring such a consultant through an attorney in order to keep the results of the analysis confidential and subject to attorney-client privilege rules. An employment attorney can also help identify how to address issues in an equal pay analysis and set up a system for setting pay for new and existing employees that is consistent with the new law.