Businesses scramble to comply with new state pay equity rules
Workers across Oregon could receive pay raises under the state's unique pay equity law that goes into force Jan. 1, but state officials have been late directing employers how to obey.
Oregon lawmakers in May 2017 passed one of the most comprehensive pay equity laws in the nation, expanding protections against pay discrimination beyond just gender to 11 classes.
Yet, the Oregon Bureau of Labor and Industries waited 18 months to finalize rules to guide employers on how to comply with the new and complicated law. The rules were released Nov. 19.
Some employers say that doesn't leave them enough time to identify disparities and adjust pay.
"This is not something you do in an afternoon looking at payroll," said Jenny Dresler, a lobbyist for the Oregon Farm Bureau. The organization represents about 7,000 farmers and ranchers.
"They look to us to help provide guidance on some of the new workplace policies and laws," Dresler said. "When I look at the timeline and the resources available to us, we do not have enough time to help everyone."
Oregon Labor Commissioner Brad Avakian, leaving office next month, didn't return a telephone message Tuesday, Dec. 11, seeking comment, but his spokeswoman defended the agency's conduct.
Employers who know of pay gaps have to give raises and adjust their pay scale by Jan. 1. Otherwise, they could be penalized by state regulators and be sued by employees who believe they're illegally underpaid.
"The bureau must accept complaints if they are filed," said Christine Lewis, Avakian's spokeswoman. "The commissioner believes we should not delay protecting people who have faced pay discrimination because of their gender, race or other protected class."
The labor bureau could order back pay from any employer it finds violating the new pay rules. The employer would have to pay the lesser of: back pay for two years or for the period of the unlawful wage disparity, plus the time it took to resolve the complaint.
What the law does
The Oregon Equal Pay Act of 2017 banned pay discrimination based on gender, race, color, religion, sexual orientation, national origin, marital status, veteran status, disability or age.
Differences in pay have to be based on seniority, education, job circumstances or cost-of-living reasons. The law prohibits asking applicants their salary history.
The law passed the Legislature unanimously after senators added a protection for employers. The law shields employers who complete a pay equity analysis and map a plan to remedy inequities from liability for damages in the subsequent three years if an employee sues.
The labor bureau started work on its rules in January and in May engaged an advisory committee of employers and others to review the proposed rules, Lewis wrote in an email to the Oregon Capital Bureau. In one instance, the rules were delayed two weeks to give employers more time to comment, Lewis said.
The agency voluntarily developed the rules "with the intent of being helpful to employers and providing guidance regarding terms in the legislation as well as considerations BOLI would apply in investigating complaints filed with the agency," Lewis wrote.
Lewis maintained that employers have been aware of the law for the past year and a half and could have complied with the law without the rules. State lawmakers did not mandate that BOLI adopt rules for the law, she said.
Lewis said employers could have gotten plenty of help from the labor bureau meantime, including seminars, fact sheets and individual consultations.
Employers want more time to understand the new rules, which run to 11 pages. Representatives from employer groups last week met with state lawmakers to share their concerns.
"Employers want to do the right thing as it relates to this law. We just need reasonable time to implement the law and the final rules," said Amanda Dalton, a lobbyist with Northwest Grocery Association who attended the meeting.
She noted that it has taken the Oregon Department of Administrative Services a full year to conduct a pay analysis of state workers — a timeline confirmed by the agency.
The reason "we were so concerned with the late release of rules is now employers are forced to rush this and get it done before the holidays," Dalton said.
Gov. Kate Brown included $15 million in her new budget to cover the state's costs of changing wages to comply with the law. So far, about 3,600 employees — roughly 9 percent of state workers — have been flagged for possible pay equity adjustments, but more analysis is expected to reduce that number, according to Liz Craig, DAS spokeswoman.
The Senate Workforce Committee is scheduled to discuss pay equity in Salem at 2 p.m., Wednesday, Dec. 12. Labor bureau officials are expected to testify about what they have communicated and how much time they have given businesses to prepare for the law change, said state Sen. Tim Knopp, the committee's vice chairman. "We'll hear what they have to say and then go from there," he said.
Approached at the Capitol Tuesday, state Sen. Kathleen Taylor, the committee's chairwoman, declined comment.
Val Hoyle, who takes office as labor commissioner Jan. 7, said she plans to be lenient toward employers. "Because the rules came out so late, we want to make sure both employers and workers understand what the rules are so we will really be focusing on education and outreach," Hoyle said.
Despite that, employers could still be vulnerable to employees' civil lawsuits.