New Oregon Law on Equal Compensation

 

House Bill (HB) 2005, the Equal Pay Act, has been passed by both the House and Senate and was signed by Governor Brown on June 1, 2017.   The common name “Equal Pay Act” is a little misleading.  This is the Equal Compensation Act.  Compensation includes wages, salary, bonuses, benefits, fringe benefits and equity based compensation.  In addition to this clarification, the new law also provides direction on what can and cannot be used as supporting processes to achieve equal compensation.  Many of you have heard about gender equity as it relates to pay.  However, so much more will now be included.  Equity must be maintained amongst work of comparable character (substantially similar knowledge, skill, effort, responsibility and working conditions in the performance of work regardless of job description or title) without consideration of race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age.

How will this bill impact your organization?

  • Prohibits screening applicants on current or past compensation.
  • Prohibits determining new employee compensation based on current or past compensation.
  • Prohibits asking applicants about their salary history or seeking it from former employers.
  • Allows pay equity to be measured based on comparable character.
  • Allows consideration (while setting pay) of seniority, merit, measurement of quality, measurement of quantity, production rate, locations, travel, education, training, experience or any combination of these.
  • Allows employers to ask what their desired salary would be.

What you need to look at?

  • Hiring policy, training, practice, process and forms.
    • Application form
    • Screening Questions
    • Interview Questions
    • Internal memos justifying pay placement (what questions are asked/answered)
    • Offer letter form and pay supporting justification
  • Compensation policy, training practice, process and forms.
    • Written policy language defining how jobs are compared
    • Written internal equity or evaluation processes that use job characteristics for comparison

NOTE:  If the company has not documented compensation policy, practice and/or forms now is the time.

This law will go into effect on the 91st day following the close of legislative session.

At the close of legislative session HR Answers will be providing Legislative Overview workshops for the various changes that will go into effect.   These workshops will be free of charge for Advantage plan members.