Oregon 2017 Equal Pay Act: What You Need to Know

Staying up-to-date on employment legislation is an essential part of any hiring manager or HR professional’s job. Not only are there standards at the federal and state level, there are local and regional changes that must also be accommodated for during the hiring process. It can be a lot to keep up with. At VanderHouwen, we recognize that managing workplace compliance can be a full-time job on its own, so we’re sharing an important update regarding Oregon’s 2017 Equal Pay Act.

What to Know About the Equal Pay Act

The Oregon Equal Pay Act was signed into law on June 1, 2017, by Governor Kate Brown. As a general principle, equal pay legislation like this aims to defend protected classes (gender, race, etc.) from discrimination in the workplace. The most urgent aspect of this new law is that employers can no longer ask candidates about their salary history when they apply for a position. Historically, it has been a practice for many organizations to inquire about the past and present salary information of candidates they interview. Often, it can help hiring managers contextualize the role that they’re hiring for and even gauge what salary levels are appropriate for certain positions. Wondering what salary levels are important for the Accounting & Finance Industry in Portland? Check out our Salary Guide.

Why It’s Being Implemented

The state has determined that, ultimately, this practice is discriminatory. Here’s why: Assume that a potential candidate has historically been paid below market level compensation because of their protected class. If prospective employers inquire about this person’s past salary, and then base the candidate’s new pay on that level of compensation, they’re ultimately perpetuating this cycle of disparity. The ultimate goal of this legislation is to ensure that people are being paid the same amount of money for the same level of work.

What to Do

The above mandate, prohibiting employers from asking about salary information, goes into effect on October 8, 2017. You should immediately do an internal assessment of your organization’s hiring processes to determine if you’ve been asking this question to candidates, and communicate clearly to your staff that this practice will not be permitted moving forward. There are also long-term implications of this legislation. The remaining provisions of this law don’t go into effect until January 2019. These provisions require that employees in the same role who are doing the same type of work are paid the same amount. You will be required to perform a salary assessment that outlines compensation data for all your employees, and could face liability in the form of punitive damages if you are found to not be compliant. More information and specifics will be rolled out in the future, but it’s important to start doing your due diligence now. Start collecting your internal compensation data and search for discrepancies. Determine if these discrepancies can be attributed to reasonable factors like level of seniority, merit, education, etc., and be sure to document this. This legislation allows for a number of exceptions known as “bona-fide factors” that must be met in order to avoid liability—for example, it’s reasonable to expect someone in Position A who has been in that role for 5 years to be paid more than someone in Position A who has been in that role for 6 months. The more time you spend on ensuring equity, the better it will be in the long run for your company.

Staffing agencies can be a great partner in helping you stay up to date on this sort of legislation. Reach out to us.