United States: 2018 Oregon Employment Law Update

Oregon's abbreviated 2018 legislative session (February 5 – March 3, 2018) resulted in few new laws for employers, but January 1, 2019 will see critical provisions in previously enacted laws taking effect.


Predictive Scheduling (2017 SB 828)

Oregon's " Fair Work Week Act" took effect July 1, 2018, and requires retail, food service and hospitality employers to provide most nonexempt employees with a written schedule at least 7 days before the first day of the schedule (increasing to 14 days in 2020).

The law also mandates providing new hires with a written good faith estimate of hours; providing active employees with sufficient notice of schedule changes and premium payments for schedule changes; multiple posting requirements; mandatory breaks of at least 10 hours between shifts, and premium payment for hours worked in the subsequent shift. The law also prohibits discrimination against employees who inquire about or seek to enforce rights under the law.

While the law applies to employers with 500 or more employees worldwide, employees from other businesses count towards this threshold if the businesses are deemed part of an "integrated enterprise." New regulations include criteria for making the "integrated enterprise" determination, and application of these criteria may mean, for example, that a single restaurant franchisee with only 25 employees could be subject to the law if it relies on its franchisor for personnel policies, management practices or supply ordering.

Compliance with the predictive scheduling law becomes particularly important on January 1, 2019, as employees will obtain a private right to file lawsuits for alleged violations of the law.


Equal Pay Act (2017 HB 2005) & BOLI Regulations

Oregon's " Equal Pay Act" was passed in 2017, but most of the law's central aspects take effect January 1, 2019. On November 19, 2018, the Oregon Bureau of Labor and Industries (BOLI) passed final regulations for the law, which it will also begin enforcing on January 1, 2019. Employees and applicants will eventually have a private right of action, but not until 2024.

Core Protections

Oregon's Equal Pay Act makes it unlawful to discriminate between employees on the basis of membership in a "protected class" in the payment of "compensation" for work of "comparable character."

Protected Classes: Unlike federal law, the Oregon equal pay law does not protect only against gender-based compensation disparities. It prohibits compensation discrimination on the basis of race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age, meaning that every employee is part of multiple protected classes.

Compensation: The law defines "compensation" to include "wages, salary, bonuses, benefits, fringe benefits and equity-based compensation," and the new regulations broadly define each of these categories, effectively encompassing virtually all manner of measurable income. Notably, the regulations take account of the fact that employees may choose different benefits, for example declining health care coverage because the employee had coverage under a spouse's plan. In that situation, "the cost of providing the benefit that would have been incurred by the employer to provide the employee with the benefit offered may be included as part of the employee's total compensation rate for purposes of calculating the employee's total compensation under this law."

Comparable Character: The law defines work of "comparable character" as work requiring "substantially similar knowledge, skill, effort, responsibility and working conditions ... with no single factor being determinative." The new regulations provide non-exhaustive lists of "knowledge considerations," "skill considerations," etc. These factors provide a useful reference point for employers to define the specific knowledge, skills and other talents required or used to perform a job (ideally in a written description created well before any complaint), as well as to develop defensible compensation levels that account for differences in talents and abilities among employees.

Allowable Pay Differences: The law allows for pay differences for comparable work, but only where they are based on one or more of the following eight factors: a seniority system, merit system, quality or quantity of work, workplace location, necessary and regular travel, education, training, experience, or a combination of these factors that accounts for the entire compensation differential. The new regulations more clearly define and limit each of these criteria.

Screening Restrictions

Founded on the idea that applicants' prior compensation levels may have been based on discriminatory practices, the Equal Pay Act prohibits employers from seeking the pay history of an applicant before making an offer of employment, and further prohibits "using information, however obtained, about a job applicant's current or past compensation to determine a job applicant's suitability or eligibility for employment." This restriction has been effective since October 2017.

Required Written Notice

Employers must provide employees written notice of the Equal Pay Act's requirements. BOLI will be creating a poster that must be conspicuously displayed in each workplace. "If displaying the poster is not feasible," the regulations provide a list of alternative notice methods that will be deemed sufficient.

The Pay Equity Analysis Safe Harbor

Oregon's Equal Pay Act includes a safe harbor that can partially insulate proactive employers from damages. If, within three years prior to a lawsuit, an employer has undertaken a reasonable equal-pay analysis of its pay practices in relation to the protected class asserted by the plaintiff, and has eliminated any wage differentials, then a court may decline to award compensatory or punitive damages.

The court may, however, still award backpay for up to two years. While not a complete safe harbor from potential liability, these protections can be significant, and a properly conducted equal-pay analysis may also preempt or moot potential lawsuits altogether.

Unfortunately, BOLI believes it lacks authority to provide guidance to employers about how to conduct an acceptable pay equity analysis, and its regulations offer nothing more than a restatement of the statute that a pay equity analysis is "an evaluation process to assess and correct wage disparities among employees who perform work of comparable character."


Janitor Bill (HB 4058) & BOLI Regulations

Spurred by reports of sexual harassment and assault against persons performing janitorial work, the 2017 Oregon legislature mandated licensing for "Property Services Contractors," a category that expressly incudes businesses performing "Janitorial Services." In response, the Oregon Bureau of Labor and Industry (BOLI) created over 40 pages of regulations addressing licensing and mandatory training for supervisors and employees on sexual harassment and sexual assault.

The regulations, however, went beyond the intent of the legislation, imposing licensing requirements and fees unrelated to business size or scope, as well as requiring contractors to be in operation for five years in order to obtain licensing. HB 4058 effectively maintained the intended protections of the original 2017 law, but eliminated problems caused by BOLI's original regulations.

In another positive change for businesses, the final BOLI regulations for HB 4058 have limited the scope of businesses deemed to be performing "Janitorial Services," and now exclude "residential housecleaning services." As a result, while Oregon businesses that recruit or supply workers to clean commercial properties may need to comply with the licensing and training requirements, those exclusively supplying workers to perform residential housecleaning services are not subject to these additional requirements.


Paid Family Leave

While paid family leave has been the subject of potential Oregon legislation for years, it has significant momentum headed into 2019. In 2018, two Oregon legislators convened a workgroup comprised of lawmakers, industry groups, employer representatives, unions, employee groups and BOLI.

The group has met throughout the year to analyze others states' programs and consider all-important funding options, and lawmakers are expected to introduce a bill early in the 2019 session. With the re-election of Governor Kate Brown and the Democratic Party's supermajority in the state Senate and House, the likelihood of passage is higher than ever.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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