Oregon Equal Pay Act’s Temporary Exclusion of Hiring and Retention Bonuses Set to Expire on September 28, 2022

On September 28, 2022, amendments to Oregon’s Equal Pay Act excluding hiring and retention bonuses from the definition of “compensation” are set to expire.

Oregon’s Equal Pay Act prohibits employers from discriminating between employees on the basis of a protected class in the payment of wages or other compensation for “work of comparable character.” According to the law, differences in pay for work of a comparable character must be based on certain bona fide factors.

Public and private Oregon employers will soon be required to evaluate the payment of hiring and retention bonuses under the act. The expiration of the amendments will create a legal hurdle to employers’ efforts to address the “Great Resignation” and a competitive hiring market in many fields, including law enforcement and healthcare.

Performing an equal pay analysis to evaluate whether wage disparities are lawful under the act can be a difficult task. Protected classes under the act include “race, color, religion, sex, sexual orientation, gender identity, national origin, marital status, veteran status, disability or age.” Protected classes are not always self-evident or self-reported. The law defines “work of comparable character” as “work that requires substantially similar knowledge, skill, effort, responsibility and working conditions in the performance of work, regardless of job description or job title.”

The law permits employers to take various factors into account when evaluating pay disparities for “work of comparable character” (including education or experience), but it also states that no single factor is dispositive. Fortunately for multistate employers, evaluations of pay disparities for “work of comparable character” under the act need only consider comparisons of Oregon employees and not out-of-state employees.

Employers that rely on hiring and retention bonuses may want to begin preparing their equal pay assessments by September 28, 2022. Alternatively, employers may want to start considering nonmonetary alternatives such as hybrid or remote work arrangements, training opportunities, personal recognition, and workplace amenities.

Ogletree Deakins will continue to monitor and report on developments with respect to Oregon’s Equal Pay Act and will post updates on the firm’s Oregon blog as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.