New Oregon Law on Equal Compensation

5 business women

June 12, 2017- A recent article written by Barran Liebman associates Anthony D. Kuchulis and Andrew M. Narus discusses the implications of the Equal Pay Act (see full article here). This law was unanimously passed by the Oregon Senate in May and signed by Governor Brown on June 1. The law’s title, “Equal Pay Act”, is slightly misleading, as this law is technically an Equal Compensation Act. It is intended to address differences in compensation among minorities, women, and other protected classes (race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability age). It prohibits employers from compensating certain classes at a rate less than other classes for work that requires the same skills, knowledge, effort, and working conditions. It states that differences in compensation are only lawful if based on merit, seniority, or other conditions measuring the quantity or quality of work. Employees who believe they have been discriminated against in violation of this law will have a private right of action starting January 1, 2019.

This act also impacts recruiters and others involved in hiring practices, as it prohibits employers from obtaining information about a job candidate’s past or current compensation. This section of the act will take effect on September 9, 2017, when the Bureau of Labor and Industries will have the authority to enforce it and issue fines. Starting on January 1, 2024, job candidates will have a right of private action against prospective employers if asked about their compensation history.

While this law is a great step toward achieving pay equality among all classes, it introduces several new challenges for employers involved in the hiring process. Not only does this law prohibit employers from asking applicants their past or current compensation, it also prohibits screening them based on past or current compensation. However, on the other hand, this law gives employers the ability to ask applicants what their desired salary would be and allows pay equity to be measured solely based on character.

In preparation for this law, it is important for business owners and recruiters to be fully informed and know how they will need to alter their hiring policy, application form, interview questions, and compensation policies accordingly. Oregon employers must act now to ensure compliance and protect their businesses from lawsuits, fines, and class action claims.