The Oregon Equal Pay Act: What Employers Need to Know

Oregon’s Equal Pay Act, which takes effect in October 2017, expands the state’s laws regarding wage disparities among employees. It also changes several rules for employers. Here, we cover some of the key points of the law.

What’s Changing?

The existing Oregon Equal Pay Act prohibited discrimination “between the sexes in the payment of wages for work of comparable character, the performance of which requires comparable skills.” Starting in October, the Act will expand its protections beyond disparities based on sex. It will include a wider range of “protected classes,” including race, color, religion, sexual orientation, national origin, marital status, veteran status, disability and age.

Which Types of Compensation Are Affected?

The Equal Pay Act applies not only to wages, but to a wage range of compensation forms, including salaries, bonuses, equity-based compensation and to benefits, including “fringe benefits.” It does not, however, apply to compensation that is based on quality or quantity of production, such as piece work or commissions.

What About Salary History?

One of the provisions of the act that concern employers is the prohibition on asking candidates what their salary was at previous employers. Specific points to remember include:

Employers may not ask an applicant how much they are currently paid, base a new hire’s pay on that individual’s current or past compensation, or comply with the Equal Pay Act by cutting a current employee’s pay.

When Can Employers Pay Different Amounts for Comparable Work?

While the Equal Pay Act prohibits employers from basing different compensation amounts on any of the factors listed in the law, such as sex, age or religion, it does allow employers to use a “bona fide factor” to explain differences in pay between employees who do similar work. Bona fide factors that are included under the new law include:

  • seniority or merit;
  • systems that measure earnings by quality or quantity of production;
  • workplace locations;
  • travel, when it is necessary and regular for the employee;
  • education, training or experience; or
  • any combination of these factors that accounts for the entire difference in earnings.

Employers who violate the new Equal Pay Act may face liability for unpaid wages, compensatory and punitive damages and attorneys’ fees.

Remember to speak to an attorney who is licensed to practice in Oregon if you have specific questions about how the law applies to your business.

To stay compliant with changes in employment law without losing your competitive edge when it comes to hiring top talent, work with a recruiter. At TERRA Staffing Group, our staffing partners can help you connect with outstanding candidates and make your hiring process more efficient. Contact us today to learn more about our recruitment services in Portland and beyond.

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