Oregon’s new Equal Pay Act and “Pay Equity Analyses” are all the rage in Oregon right now. The majority of the Act’s new requirements go into effect January 1, 2019. Let’s talk about 10 things you should do before the end of the year to make sure you are in compliance with the law.

  1. If you haven’t already removed past compensation questions from your job applications, do so now. The Act makes it unlawful to ask job applicants (or their prior employers) about their current or past compensation until after a conditional job offer that includes the amount of compensation is made.
  2. Train your hiring managers not to ask applicants about current or past compensation. The Act requires employers to pay people based on the job they are (or will be) performing, not what they were paid by a previous employer. Employers must not ask applicants about their current compensation. You can, however, ask applicants about their salary and compensation expectations – but be careful to frame the inquiry to expectations, and be aware that a badly phrased question is a potential violation of this particular provision of the statute.
  3. Rethink salary negotiations – in Oregon, those might be a thing of the past (!). The Act requires employers to pay employees who are doing comparable work the same, unless there is “bona fide factor” to explain the difference such as a seniority system, a merit system, training or experience, or another factor expressly listed in the law. Unless tied to one of those listed factors, market demands or negotiating skills are not bona fide factors justifying a pay disparity.
  1. Be careful with sign-on bonuses. All types of compensation, including bonuses and benefits, are considered in determining whether there is a pay disparity. If one employee receives a sign-on bonus but another employee doesn’t, you must be able to (truthfully!) explain the disparity with one of the “bona fide factors” in the law. Instead of sign-on bonuses, consider offering to reimburse relocation expenses. Relocation reimbursements are not taken into account when calculating compensation and comparing pay disparities, as long as they are reimbursements of actual expenses rather than lump sum bonuses.
  2. Take a look at your job descriptions and what jobs are “comparable.” The Act distinguishes among employees depending on whether they are doing work of “comparable character.” Work of comparable character means work that requires “substantially similar knowledge, skill, effort, responsibility and working conditions,” regardless of job title or job description. Review the different types of work your employees are performing and consider grouping employees into categories based on whether they are doing work of “comparable character.” For employees who are doing work of comparable character, take a deeper dive to identify disparities and, if you find any, whether there’s a “bona fide factor” (or a combination of them) justifying the pay disparity.
  3. Make sure you are offering the same benefits to employees who do work of comparable character. Again, all types of compensation, including benefits, are taken into account when determining whether there is an unlawful pay disparity. With regard to benefits, the law looks at what types of benefits are offered to employees (not necessarily the value of the benefits the employee selects).
  4. Don’t reduce anyone’s compensation to comply with the law. The Act specifically prohibits employers from reducing an employee’s compensation to comply with the law. If you are going to make any changes, you need to increase compensation. Be careful about messaging and carefully consider timing for any raises – i.e., first of the year? During a performance review?
  5. Post the new BOLI notice. Like most Oregon laws, the Equal Pay Act requires employers to post a notice advising employees of their rights under the law in an area where all employees can easily see it. BOLI’s Equal Pay notice and 2019 Composite Posters are both available here.
  6. Consider hiring a third party to conduct a “pay equity analysis.” A lot of third-party vendors are selling “pay equity analysis” services. Whether hiring a third party to review your pay practices makes sense depends on the size of your company, your pay practices, and how many different types of employees you have. If you have questions about whether hiring a third party makes sense for your business, please contact us.
  7. Shameless plug: Sign up for our Breakfast Briefing on January 24. We will take a deep dive into the Act’s requirements, discuss best practices, and try to answer all the questions you might have. You can sign up for our seminar HERE.