Oregon legislators introduced a bill this session that would amend the Oregon Equal Pay Act to exempt certain bonuses (such as signing and retention bonuses) from equal pay calculations.
Oregon’s current equal pay laws require all types of compensation, including bonuses, to be considered in determining whether there is a pay disparity. Employers cannot pay an employee a higher rate than a coworker for similar work unless the pay disparity is justified by factors such as seniority, education, training, or experience.
Oregon House Bill 3205, which is backed by both public and private employers, would amend the Equal Pay Act to exempt hiring and retention bonuses from equal pay calculations. Proponents of the bill argue that this change in Oregon’s equal pay laws will help local businesses keep and attract employees, which has been no easy task since the onset of the COVID-19 pandemic in 2020. Opponents of the bill caution that the proposed amendments provide no protection to ensure that hiring and retention bonuses are paid equitably and universally. Without those protections in place, opponents fear that unconscious bias will lead to pay discrimination when employers offer bonuses to workers.
Oregon is an outlier amongst states throughout the country and is the only state that includes bonuses for purposes of equal pay calculations. HB 3205, if passed, would bring Oregon back in line with the policies of other states. In response to the pandemic, Oregon previously amended Oregon’s Equal Pay Act to exempt hiring and retention bonuses from equal pay calculations, but those changes expired in September 2022.
House Bill 3025 is currently in the House Business and Labor Committee. If passed out of committee, it will then go to a full vote before the Oregon House of Representatives before heading to the Senate.
The current text of HB 3205 can be found here.
If you have any questions regarding Oregon’s Equal Pay Act or with compliance with Oregon, Washington, or Federal employment laws more generally, please do not hesitate to contact the FWW Employment Attorneys below.