House Bill 2005

Oregon Announces Final Rules for Equal Pay Law Set to Take Effect January 1, 2019

As we reported last month, the Oregon Bureau of Labor and Industries (BOLI) issued proposed regulations interpreting the provisions of the new Oregon Equal Pay Act of 2017, which will become effective January 1, 2019.

On November 19, 2018, after receiving a number of comments on proposed rules BOLI filed final rules with the Secretary of State. Stakeholders that provided input on the potential impact of the rules as originally proposed ranged from large law firms and industry groups to small business owners and farmers, as well as multiple higher education institutions (including Oregon State University, Portland State University, the University of Oregon, and the Oregon Community College Association).

Some of the noteworthy changes between the proposed and final rules are that the final rules:

  • Added the language “regardless of job description or job title” in the definition of “work of comparable character,” thus emphasizing that job title or written job description alone cannot establish that any two employees are (or aren’t) “substantially similar.” OAR 839-008-0000(17).
  • Clarified in OAR 839-008-0005(2) what it means to “screen job applications based on current or past compensation.” In particular, the final rules narrow the scope of this language to make clear that the prohibition of “screen[ing]” in ORS 652.220(1)(c) bars only the consideration of current or past compensation to determine “a job applicant’s eligibility or suitability for employment.”  By contrast, the draft rules had proposed that prohibited “screen[ing]” would include any use “to group, sort, or select [employees] at any stage of the hiring process,” or to assess “[a] current employee’s eligibility for an internal transfer, move or hire to a new position with the same employer.”  This narrowing makes clear that the limits of the new prohibition on using prior pay to “screen.”
  • Added “creativity” and “precision” as examples of the type of “skill” considerations to be evaluated in determining whether any two employees do, in fact, perform “work of a comparable character.” OAR 839-008-0010(1)(b).
  • Eliminated language in proposed rule OAR 839-008-0010(2) that would have stated that “[m]inor differences in knowledge, skill, effort, responsibility, and working conditions will not prevent jobs from being comparable.” This change is consistent with comments submitted by a host of employers—including NFIB Oregon (a non-profit advocacy group for small businesses), the Oregon Farm Bureau, and Oregon Business & Industry—who expressed concern that the “minor differences” language could create confusion and be read to conflict with the statutory standard of “substantially similar.”
  • Revised OAR 839-008-0010(2) to make clear that “[e]valuations of work of comparable character need only consider comparisons of Oregon employees.”
  • Eliminated the proposed “Equal-Pay Analyses Surveys” rule.

A number of concerns expressed by commentators went unaddressed in the final rules, however.  Several commenters requested, but BOLI has not yet provided, a “pay calculation” tool akin to that provided by the Massachusetts Attorney General’s Office.  In addition, commentators noted that the new law includes as “protected classes” several groups on which employers may not routinely collect demographic information (e.g., sexual orientation or marital status), which make it impossible for employers to proactively monitor pay differentials across these groups which the law purports to prohibit.  And a number of others asked the rules to clarify the law regarding pay differentials that may exist between employees in collective bargaining units and those outside those units, yet the final rules do not speak to the issue.

By and large, though, Oregon employers should be heartened by these changes.  They eliminate some of the more problematic provisions of the rules as originally proposed and underscore the fact-specific analysis of work performed needed to determine whether employees in fact perform “work of comparable character” within the meaning of the new law.

Orrick will continue to monitor additional developments in interpreting and applying the new law as it takes effect, and to advise employers in Oregon on compliance strategies in light of the new law.

In Oregon, Employers Await Guidance as New Equal Pay Law’s January 1, 2019 Effective Date Looms

The Oregon Bureau of Labor and Industries (BOLI) has issued proposed regulations interpreting the provisions of the new Oregon Equal Pay Act of 2017, which will become effective January 1, 2019.  Although the prohibition against “seek[ing]” salary history from applicants already is in effect, many of the law’s most significant provisions go into effect on January 1.  READ MORE

The Pay Equity Plot Thickens: Unique Aspects of Newly Adopted Oregon Equal Pay Act Warrant Special Attention

On June 1, 2017, Oregon Governor Kate Brown signed into law the Oregon Equal Pay Act of 2017 (House Bill 2005). Although pay equity legislation has been proposed or passed in a number of jurisdictions throughout the country, Oregon’s new law merits special attention.  The obligations it imposes on employers seeking to justify pay differentials are arguably among the strictest in the nation, but it also affords employers some key protections and potential safe harbors.  Given the focus by government agencies and plaintiffs’ attorneys on pay equity in the technology sector out West, companies seeking to maintain or expand in the so-called “Silicon Forest” should pay special attention to the provisions of this new law.

We took a deep dive into the background and history of the legislation, and share some key observations about what it says—and doesn’t say—here. READ MORE