Holy BOLI! The Impact of Final BOLI Rules on Employer Equal Pay Analyses
From our Winter 2019 e-newsletter
In November of 2018, the Oregon Bureau of Labor and Industries (BOLI) issued administrative rules to explain your duties as an employer under the Equal Pay Law, which, among other things, offers some protections from liability for employers who conduct an “equal pay analysis.” This means that you could protect your city or district from liability for damages if you carefully evaluate your employees’ compensation and begin the process to correct any compensation differences that are due solely to differences in gender, race, national origin, or other protected classes.
How do I determine if our compensation violates the new law?
Under the Equal Pay Law, employees who perform “work of comparable character” must be paid the same unless “bona fide factors” justify a difference in pay. Although the law defines the term “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 title,” many employers sought further guidance from BOLI regarding this definition. As a result, BOLI issued OAR 839-008-0010 to provide employers with examples of what constitutes skill, effort, responsibility, and working conditions. For example, an employee’s precision and creativity can factor into whether she has a particular “skill,” while a difference in two employees’ working hours and physical surroundings can factor into the employees’ “working conditions.” The new rule’s examples of knowledge, skill, effort, responsibility, and working conditions include:
o Certifications, licenses, certificates, education, experience, or training.
o Ability, agility, coordination, creativity, efficiency, experience, or precision.
o Amount of physical or mental exertion needed, amount of sustained activity, or complexity of job tasks performed.
o Accountability, amount of decision-making discretion, degree of significance of job tasks, amount of employee autonomy, extent of employer supervision over employee, or the extent that employee’s work exposes employer to risk or liability.
- Working conditions:
o Work environment, hours worked, time of day of work, physical surroundings, or potential hazards.
The above list is not-exhaustive; you may use other reasonable and non-discriminatory considerations as well. When doing an analysis, you should always discuss and document your decision-making process and carefully cite these types of “work of comparable character” considerations to help avoid unlawful pay discrimination.
What do I do if I discover pay differences?
The Equal Pay Law requires employers to pay employees who perform work of comparable character the same amount, unless “bona fide factors” justify a difference in pay. The law identifies “bona fide factors” as factors which are based on:
- A seniority system;
- A merit system;
- A system that measures earnings by quantity or quality of production, including piece-rate work;
- Workplace locations;
- Necessary and regular travel;
- Any combination of the factors described above.
Although the law lists bona fide factors, it does not provide examples of or describe the factors. To address this, BOLI issued OAR 839-008-0015, which provides examples of the bona fide factors and explains the factors in greater depth. For example, the rules now identify an employee’s performance rating scale as an example of a merit-based system and specifically lists the completion of a certificate or degree program as an example of education considerations that would allow a pay differential. The rule also recognizes cost of living, desirability of worksite location, and minimum wage zones as examples of workplace location considerations that might justify a pay differential, as well as on-the-job trainings and formal training programs. Thus, if you have employees who perform work of comparable character, but receive different pay, you must show in your equal pay analysis that there are good and justifiable reasons for the pay difference. To do this, you must use the above-listed “bona fide factors” and document your reasoning.
Where can I get assistance to do an Equal Pay Analysis?
Equal Pay Analysis can get complicated very quickly. If you believe you would benefit from expert assistance, there are consultants who specialize in such work. Our firm has not used any of these consultants and cannot vouch for their competency, however, we’ve learned that the Local Government Personnel Institute and HR Answers are both offering such services.
If you have any further questions about the new Equal Pay Law or other employment matters,
please feel free to call us.