Why businesses in Oregon may need an equal pay analysis

This article looks at why businesses should get an equal pay analysis done to avoid potential liability.

On January 1, 2019, as the Bend Bulletin reports, Oregon's expanded equal pay law will go into effect. The law is one of the most far-reaching equal pay laws in the country and applies not just to differences in pay based on gender but to any protected class. While the law allows for discrepancies in pay to exist for "bona fide" reasons, many employers may either not know what those reasons are or how they can prove that a bona fide reason for an exception actually exists.

Who is covered by the law?

The law expands equal pay protections to any protected class of worker, which covers gender, race, color, sexual orientation, religion, disability, age, veteran status, national origin, and marital status. The law makes it illegal to compensate workers of a protected class differently from another employee for performing "work of comparable character" and it prohibits asking job applicants about their current or past compensation.

What is a bona fide exception?

Of course, there are plenty of cases where two employees may perform similar work but still receive different levels of compensation. As Oregon Business reports, such discrepancies can now only occur for what the law refers to as "bona fide" reasons. These reasons include pay discrepancies due to seniority, merit, workplace locations, job-related travel requirements, training, education, experience, or a system that determines compensation based on an employee's job performance.

Proving a bona fide factor

Many companies may have bona fide reasons for why they pay one employee less than another. However, it is important to have documentation backing up those reasons. Employers should work with an attorney to perform an equal pay analysis, which will help determine whether pay discrepancies exist between employees who perform similar jobs and whether any bona fide factors exist that can account for this discrepancy.

Because an equal pay analysis is protected by attorney-client privilege, if the findings of the analysis show that an unjustified pay discrepancy exists that analysis cannot be used by any potential future claimant against an employer. However, the employer can choose to use the analysis if the analysis shows that a pay discrepancy doesn't exist or, if it does, that there is a bona fide reason for the discrepancy.

The findings of the equal pay analysis can also help employers determine who may need more compensation in order to ensure the employer is in compliance with the expanded Equal Pay Law. The law expressly forbids decreasing another employee's compensation in order to achieve pay parity.

Business law advice

Oregon's legal landscape for businesses is constantly evolving. Businesses need to ensure they are in step with the law in order to reduce their liability exposure. An experienced business and commercial law firm can help employers understand recent changes in the law and help bring them into regulatory compliance.