Earlier this year I wrote a six-part series of articles on the weaknesses of Oregon’s pay equity law. The 2019 Legislature fixed some of the primary challenges, including removing inadvertent incentives for employers to inquire into employees’ private lives and allowing pay differences based on worker light-duty programs. However, the law continues to foster systemic discrimination by embracing potentially biased factors as justifications for pay differentials and ignoring important nondiscriminatory factors.

Oregon’s Equal Pay Act prohibits employers from paying employees who work in comparable jobs different compensation based on their protected class. The protected classes include race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability and age.

Employers may pay employees in comparable jobs different compensation if the difference is based on one or more bona fide factors, such as a seniority, merit or productivity system; work location; education; etc.

The unique beauty of Oregon’s pay equity law is the safe harbor it provides to employers. If employers conduct an equal-pay analysis every three years and make progress toward eliminating wage differentials, the law offers protections against emotional distress and punitive damages.

2019 fix No. 1: Employers no longer have to inquire into employees’ private lives

This was the most important “fix” of 2019. Under the law’s prior version, employers could only take advantage of this defense if their pay-equity analysis considered the plaintiff’s protected class and made strides to eliminating pay differentials for everyone in that class. To accomplish this, employers had to ask employees private questions about religion, sexual orientation, disability, etc., and categorize workers according to protected class. Without such inquiry and categorization, the employer could not prove that it reviewed the plaintiff’s protected class.

Now, a pay-equity analysis need only include “a review of practices designed to eliminate unlawful wage differentials.” Therefore, if an employer reviews and eliminates pay disparities among all employees regardless of protected class, it should fulfill the requirements of the statute. And employers need no longer make uncomfortable inquiries and categorize workers.

2019 fix No. 2: Employers can pay different rates to workers in light-duty jobs

Another improvement is that an employer may pay a different level of compensation to an employee performing modified work due to a covered workers’ compensation injury or other medical condition. Many employers allow employees to work in light-duty jobs while they recover from injuries and pay the worker his or her regular pay rate instead of the often lower light-duty rate. This allows the employee to maintain their income during recovery and allows the employer to avoid workers’ compensation charges.

But under these circumstances, an injured male electrician who is performing light-duty office work in an environment with mostly women may be making more money than the women. Under the law’s prior version, that could have violated the statute. However, the new “fix” allows such disparities to exist if based on a bona fide light-duty type program for injured workers.

Hopeful 2020 fix: New non-discriminatory factors to justify pay differences

Unfortunately, the law continues to foster systemic discrimination by embracing potentially discriminatory factors to support pay differentials and ignoring nondiscriminatory factors. The law allows employers to justify pay differentials between workers performing the same jobs if the difference is based on a seniority, merit or productivity system; education; travel; workplace locations; training; experience; or a combination of the above. These factors have the potential to cultivate systemic discrimination in the workplace.

For example, an employer pays superintendents with college degrees more than those with high school diplomas. Perhaps in that community, fewer minority superintendents have college degrees due to lack of access to education for minority students. Oregon’s law allows the employer to carry that systemic racism (that the employer had nothing to do with) into the workplace and justify its continuation by paying superintendents with less education less compensation.

Basing pay differentials on experience and seniority may work against women who may take more time away from the workforce to care for their families due to society’s deeply engrained gender-biased familial system. And a disabled person may be less likely to work in remote locations where pay may be higher. Paying more to workers who engage in remote jobs may inadvertently discriminate against the disabled, but such discrimination is justified under Oregon’s law.

The only bases that fairly justify pay disparities are those that have to do with job performance, market demands, contract requirements, skills, knowledge, and similar factors that deal with who the employee is now and the job he or she has to perform. Pay differences should not be based on factors that implicate the opportunities available to the worker as a child, the length of time the worker has been in the workforce, the workers’ disabilities, or other inherent characteristics.

Rather, a superintendent with a high school diploma may have greater knowledge and skill than the one with a college degree. The employee with the most seniority may be a mediocre performer. The worker hired as a laborer in a building boom may have negotiated a higher wage, giving him enough financial stability to climb the ladder. The workers on the public project site may get paid more than the ones across the street on the private site because of factors having nothing to do with skin color,
country of origin, gender, financial resources or health.

The employer that pays more to workers who do the best job, enter the market at a profitable time, or work under a more favorable contract is not allowing systemic discrimination to be carried into the workforce because these factors have nothing to do with the workers’ history. Rather, these factors focus on what the employee brings to the job at hand.

Column first appeared in the Oregon Daily Journal of Commerce on November 25, 2019.