Potential exposure for a violation of Oregon’s Equal Pay Act is considerable
Employees alleging unpaid wages or pay equity discrimination may be awarded two years of back pay, compensatory and punitive damages, and attorney fees.
Unlawful practices under the law include:
- Discriminating between employees on the basis of an employee’s status as a member of a protected class in the payment of wages or other compensation for comparable work;
- Compensating an employee at a greater rate than that which the employer compensates employees of a protected class for comparable work;
- Screening job applicants based on current or past compensation;
- Using current or past compensation to determine compensation for a position;
- Seeking the compensation history of an applicant prior to making an offer of employment that includes an amount of compensation;
- Reducing the compensation of any employee in order to comply with the law;
- Discriminating against an employee because the employee has filed a complaint or testified under the Equal Pay Act.
Under this law, “protected class” is a group of persons distinguished by race, color, religion, sex, actual or perceived sexual orientation, national origin, marital status, veteran status, disability, or age.
Employers may pay employees varying compensation levels for work of a comparable character if the difference is based on a bona fide factor related to the position, such as (1) a seniority system; (2) a merit system; (3) a system that measures earnings by quantity or quality of production, including piece-rate work; (4) workplace locations; (5) travel, if necessary and regular; (6) education; (7) training; (8) experience; or (9) any combination of these factors, if the combination accounts for the entire compensation differential.
How to Prepare
Immediately make sure your company is not screening job applicants based on compensation history or using applicants’ compensation history to determine the compensation level for a new position.
Do not seek an applicant’s compensation history before making an offer of employment that includes an amount of compensation. The Bureau of Labor and Industries will begin enforcement of most provisions of the Act on January 1, 2019. Employees will also be able to bring a civil lawsuit for violations of a majority of the Act on January 1, 2019. Beginning January 1, 2024, employees will be able to bring civil lawsuits for violations of the prohibition against seeking pay history. Please note, if the alleged violation is limited to seeking an applicant’s compensation history, and not actual pay inequity, the complainant will be limited to compensatory and punitive damages and will not have the right to seek back pay.
Prior to January 1, 2019, conduct an “equal-pay analysis.”
An employer may avoid compensatory and punitive damages if it can show that, within three years before the date the employee filed the action, the employer (1) conducted an equal-pay analysis of its pay practices that was reasonable in detail and scope and related to the protected class asserted by the employee; and (2) eliminated the wage differentials for the plaintiff and made reasonable and substantial progress toward eliminating wage differentials for the protected class asserted by the employee.
Employers conducting an equal-pay analysis may ask employees to complete a voluntary survey eliciting protected status information if the employee responses are limited to use for the equal-pay analysis, and the summary of the analysis does not identify individual employees by protected class status. If your company surveys employees, the company must inform employees of the purpose of the survey and give employees an option to complete the survey without including their name.
The following non-exclusive steps should be included in your analysis:
(1) determine which jobs are comparable
(2) compare compensation in those jobs, screening for protected classes
(3) evaluate existing workforce data (employee experience, education, training, seniority, performance, protected class identifiers)
(4) ensure all differences in compensation are fully explained by the bona fide factors related to the position. Whether an equal-pay analysis is reasonable in detail and in scope in light of the size of the employer will be fact specific to each employer.
If you find that you are out of compliance for any of your employees, do not lower pay to come into compliance. After you conduct an equal-pay analysis, you may have adjustments to make. An employer may not lower a worker’s wages to come into compliance with the law.
Consider consulting your attorney to ensure you meet the requirements of the equal-pay analysis. While evidence of an equal-pay analysis is not admissible in proceedings outside of the Equal Pay Act, your equal-pay analysis may be discoverable in any litigation. Conducting an analysis under the consultation of your attorney may help keep you in compliance with the law and keep the analysis privileged, allowing you the freedom to do an honest and full analysis. Schwabe can assist in performing equal-pay analyses.
This is a brief summary and does not contain all of the requirements of the law. In addition, the rules may not yet be final so the law may still change. Please talk to your attorney if you have any questions.