Oregon recently enacted the Oregon Equal Pay Act of 2017 (the Act). The Act expands upon existing federal and state law to address persistent pay gaps between genders, races, and those in other protected classes by encouraging employers to proactively assess their pay practices. The majority of its provisions will become effective on January 1, 2019, to provide Oregon employers time to address any issues that would prevent them with complying with the new law.

It is an example of the growing effort by state governments to become more proactive in addressing pay equity issues. California, New York, Nebraska, Maryland, and Massachusetts have all updated their laws within the past year or so to be more aggressively address pay equity disparities.

Under the federal Equal Pay Act, employers are prohibited from practicing any acts of gender discrimination when it comes to wages.

Since the enactment of the federal Equal Pay Act, most of the states have put in place supplemental pay equity laws. The only two states without pay equity laws are Alabama and Mississippi, according to the National Conference of State Legislatures.

In Oregon’s case, some of the changes enacted included a rewording of existing law, such as replacing the requirement for equal pay between “the sexes” to “protected classes,” language that broadens the law to cover other protected groups based on race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disabilities or age. In addition, it prevents employers from reducing a current employee’s salary to make it comparable to other employee salaries in order to comply with the Equal Pay Act.

The Oregon legislation also prevents employers from asking for the salary history of an applicant or employee from either the applicant or employee or his or her current or former employer. This provision will go into effect in the fall.

Employees of Oregon companies who believe they are victims of salary discrimination can either file a complaint with Oregon’s Bureau of Labor and Industries (“BOLI”), or a lawsuit against their employer. Employees do not need to file a complaint with the BOLI before filing a lawsuit.

Employers found to violate the Act may have to provide unpaid wages to employees. The law also allows for compensatory and punitive damages if it is found that an employer committed fraud or demonstrated malice or willful misconduct.

As states like Oregon become more assertive on pay equity issues, many companies are being advised to conduct pay equity analyses to get ahead of any wage disparities that could put them in non-compliance with federal or state laws. In Oregon, such an analysis is a key part of an employer’s defense. Oregon employers may defend themselves by filing a motion to disallow an award of compensatory and punitive damages if they can provide proof that they completed an equal-pay analysis of the employer’s pay practices within the three years before a lawsuit was filed. The analysis must be deemed to have a reasonable scope and be related to the protected class of the individual filing the lawsuit. Employers in Oregon also must demonstrate that they have eliminated the wage differential for the individual in question and made progress toward eliminating wage differentials for the associated protected class.

Whether your state is becoming more active in addressing pay equity issues, there are steps all employers can take to get in front of potential pay equity issues:

Update yourself on what the state governments in the states in which you do business are doing to address pay equity issues.

Consider conducting a pay equity analysis of your employees under attorney client and privilege. Use the results to identify and address any wage differentials that might be cause for charges of pay discrimination.

Review hiring practices to be sure that applicants’ past compensation is neither solicited nor plays a role in compensation offers to new hires.

Document hiring processes, as well as employee performance, to identify any legitimate reasons for pay disparities that comply with the laws under which your company operates.