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Oregon Temporarily Excludes Hiring and Retention Bonuses From Pay Equity Requirements

On March 7, 2022, Oregon adopted a temporary amendment (SB 1514 (2022)) that excludes hiring and retention bonuses from the state’s definition of wages for the purpose of complying with the state’s pay equity law, by allowing employers to use these bonuses to hire or retain employees without violating pay equity law. The exclusion became effective on upon adoption, on March 7, and ends on September 28, 2022.

Under state law, every worker must get equal pay for equal work regardless of their gender, race, age, or other protected characteristics. Employers must pay employees the same amount as other people doing comparable work including wages, bonuses and benefits. The law also prohibits employers from giving someone a pay cut to make their pay equal with other employees.

The law has limited circumstances where different pay may be allowed, but these differences must be based on specific bona fide factors including one or more of the following:

  • A seniority system;
  • A merit system;
  • A system that measures earnings by quantity or quality of production, including piece-rate work;
  • Workplace location;
  • Travel;
  • Education/training; or
  • Experience.

Next Steps for Employers

The temporary exclusion of hiring and retention bonuses from the definition of wages should assist Oregon employers with maintaining adequate staffing levels during the COVID-19 state of emergency without violating the pay equity law. However, Oregon employers should also be mindful of the requirements under the law related to hiring and non-discrimination including, but not limited to, making salary history inquiries and discriminating against employees because they make a complaint or are testifying in any investigation related to pay equity law.

Employers are encouraged to review and update their compensation structures as needed to comply with all the other requirements under state law. Best practice is to consider conducting a pay equity audit to determine if any pay disparities exist that are not attributable to bona fide factors.

How HR Works Can Help

HR Works offers pay equity analysis services that includes a review of compensation practices, creating appropriate pay groups, performing regression analysis, identifying irregularities and providing recommendations for adjustments and producing final results report. To learn more contact us at 1-877-219-9062.

HR Works, headquartered in Upstate New York, is a human resource management outsourcing and consulting firm serving clients throughout the United States for over thirty years. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.