Jun 232017

To recap our previous post, wage discrepancies between employees may only be based on the following bona fide reasons:

  1. A seniority system;
  2. A merit system;
  3. A system measuring earnings by quantity or quality of production (including piece rate);
  4. Workplace location;
  5. Travel (if necessary and regular for employees);
  6. Education;
  7. Training;
  8. Experience; or
  9. A combination of these factors, if they account for the entire pay discrepancy.

Discrepancies attributable to the factors above should be reasonable. For instance, paying an employee who has a master’s degree 10% more than her older colleague with a bachelor’s degree may be reasonable. Paying her 75% more and claiming the difference is due to the higher level of education would likely not hold up in court.

The law also prohibits employers from asking applicants how much they make in their current or former positions, and likewise prohibits employers from asking an applicant’s current or former employers about their wages. This is intended to prevent the continuation of pay discrepancies that could be traced back to an employee’s inclusion in a protected class. If employers come across this information without asking (e.g. the candidate volunteers it), they should ensure that it does not influence their offer.

An employee who brings a successful civil claim against an employer under this law will be entitled to a year of back pay, liquidated damages equal to that amount (thereby doubling the award), and reasonable attorneys’ fees.

No Intent or Bad Faith Required

It is crucial for employers to understand that discriminatory intent is not necessary to violate this law. An employee does not need to prove that she is paid less because she is a woman, or black, or a veteran; if the employer cannot explain the pay differential based solely on the allowable reasons listed above, the employee will win her case. This makes it essential that employers conduct an internal audit of their pay scales to uncover any differences in pay that they are unable to explain.

Negotiation, Desperation, or a Job Seekers’ Market Are Not Acceptable Reasons

Another important takeaway is that negotiation is not an acceptable basis for wage discrepancies, nor will it serve as a defense in litigation. Oregon’s EPA—while not prohibiting negotiation—will significantly limit the situations in which negotiation is appropriate. For instance, while offering a generous bonus schedule and fringe benefits to an applicant for a one-of-a-kind position may be acceptable, wages and benefits for positions of “comparable character” should remain the same, unless the discrepancies can be justified by the acceptable reasons listed above.

Additionally, over-the-top offers made because a position needs to be filled quickly, or because an applicant-friendly job market is emboldening job seekers to ask for higher pay, may prove problematic down the road. The law does not allow for employers to reduce employee pay to comply with the law, meaning that lower-paid employees may need to receive raises instead.

Action Items for Employers
  1. Administer (or hire someone to conduct) an audit of your overall pay structure as well as an analysis of job groups and individual wages. The analysis should focus on whether differences in pay can be fully and reasonably explained by the bona fide factors above. Doing the audit sooner rather than later will allow you to plan for what may be significant changes in pay structure.
  2. Edit any application forms, interview templates, or other documents that ask applicants or their employers about current wages or salary history. If you don’t want to change your practices now, put it on your calendar to revisit these documents in 2018.
  3. Exercise caution with respect to offers or raises, starting now. Because the law does not allow for employee pay to be reduced for compliance, wages that are inordinately high due to factors not on the bona fide reason list (e.g. negotiation, desperation) could necessitate across-the-board increases.

Source:  HR Support Center

 Posted by at 11:16
Jun 052017

Oregon Governor Kate Brown has signed H.B. 2005 into law, also known as the Oregon Equal Pay Act of 2017.  This law aims to reduce persistent pay inequities, and also provides a safe harbor for employers that have voluntarily assessed their pay practices to identify and eliminate discriminatory actions.

Under the OEPA, employers may not “in any manner discriminate between employees on the basis of protected class in the payment of wages or other compensation for work of comparable character.” This includes paying “wages or other compensation to any employee at a rate higher than that at which the employer pays wages or other compensation to employees of a protected class for work of comparable character.”  The following are key provisions:

  • Employers may not ask an applicant how much he/she is currently paid;
  • Employers may not base a new hire’s pay on that individual’s current or past compensation;
  • Employers may not comply with the Equal Pay Act by cutting a current employee’s pay.

However, employers may pay employees for work of comparable character at different compensation levels if the difference is due to a bona fide factor related to the position based on:

  • Seniority
  • A merit system
  • A system measuring earnings by quantity or quality of production (e.g. piece-rate work)
  • Workplace locations
  • Travel (if necessary and regular for employees)
  • Education
  • Training
  • Experience

Employers that violate the Equal Pay Act may be liable to employees for unpaid wages.  Employees may seek redress by either filing a complaint with Oregon’s Bureau of Labor and Industries (“BOLI”), or by bringing a lawsuit against their employer directly.  There is no exhaustion requirement mandating the filing of a complaint with BOLI prior to bringing a lawsuit.

Compensatory and punitive damages are also available upon a showing of an employer’s fraud, malice, or willful and wanton misconduct.  However, an employer is entitled to file a motion to disallow an award of compensatory and punitive damages, which shall be granted if the employer demonstrates, by a preponderance of the evidence, that it: (1) completed, within three years before the date that the action was filed, an equal-pay analysis of the employer’s pay practices in good faith that was reasonable in detail and scope, and related to the protected class asserted by the plaintiff; and (2) eliminated the wage differentials for the plaintiff and has made reasonable and substantial progress toward eliminating wage differentials for the protected class asserted by the plaintiff.  In light of this provision, employers should consider voluntarily conducting equal-pay analyses to identify and rectify instances of pay discrimination.

The bulk of the Equal Pay Act’s provisions become operative on January 1, 2019, giving employers time to address any existing pay disparities.

Source: JDSupra

 Posted by at 10:37
Jun 052017

Oregon’s minimum wage will increase on July 1, as follows:

  1. Within Portland’s Urban Growth Boundary: $11.25
  2. Frontier Counties*: $10.00
  3. Remaining Areas:  $10.25

The new minimum wage applies for hours worked on July 1st, 2017, and later.

If your pay period spans that date, you can choose to pay June hours at the lower rate.  When you submit your payroll hours, please specify how many hours to pay at the old rate vs the new rate.

The Oregon minimum wage is set to increase on July 1 of the next several years.

*Frontier counties include Malheur, Lake, Harney, Wheeler, Sherman, Gilliam, Wallowa, Grant, Jefferson, Baker, Union, Crook, Klamath, Douglas, Coos, Curry, Umatilla, and Morrow.

 Posted by at 10:18
May 022017

Few things are more frustrating for employers than finding out that a new hire oversold their knowledge, skills, and abilities. The employee looked great on paper and appeared confident and competent in the interview, but when it came to doing the basic duties of the job, they just didn’t have what it took.

To lessen the likelihood of this unfortunate situation, some employers want to see the candidate in action before formally hiring them. They’ll invite the candidate to spend a day or so at the workplace, shadowing a seasoned employee or doing some of the tasks of the job. This is known as a working interview. It’s legal to conduct working interviews, but there are serious drawbacks and risks to understand and consider. Consequently, we generally don’t recommend doing them. However, if you do conduct them, here are some issues to be aware of:

First, working interviews must be compensated at a rate of at least the minimum wage. You’re basically hiring the candidate as an employee for that span of time. At the bare minimum, you would need to have the person complete a Form W-4 and Form I-9 to do the work. You cannot classify them as an independent contractor as they don’t meet the legal criteria for that classification. Legally, they are temporary employees – even though the time is fixed at one day or a couple of hours. Should you decide to go this route, we recommend that you have a check prepared for them to take with them at the end of the day. This way you don’t run afoul of any state laws pertaining to the delivery of final paychecks.

There are several risks to consider if you decide to do a working interview. One is that the candidate could be injured during that time and you would be liable for a workers’ compensation claim. If the employee wasn’t reported and paid correctly, your workers’ compensation carrier may not cover the claim. Additionally, candidates completing working interviews could file for unemployment if you do not hire them for additional work after the working interview. Unemployment tax is tied to the prospect’s wages during the preceding year, not to the employer. The shorter the period the person is employed by you, the less they will draw from your unemployment account.

Fortunately, there are alternatives to the working interview.

Alternative 1: Use a Temp Agency
If it is essential that you observe the candidate in your office under regular working conditions, you can contact a temporary agency and inquire if they would hire the candidate for a single day. The person would then be the employee of the temporary agency and no employee-employer relationship would be created between your company and the candidate. If you anticipate a lot of working interviews, this might be a good option to explore. You will, however, pay a premium for this service.

Alternative 2: Skills Testing
Another option is making a skills test part of the interview. The difference between working interviews and skills testing is the environment in which they are done. During a working interview, you ask the candidate to work alongside an employee or complete tasks that are a benefit for your organization. For instance, if you were to ask a candidate for an accounting position to work on your next payroll for four hours with the intention of using their work, you would have to pay them for their time. In contrast, skills testing involves setting up a scenario and asking the candidate to complete certain tasks on their own that will not result in a net gain to your organization. For example, you could provide a candidate with old payroll information, assign them a task with that information, and then assess their work for accuracy. This would be an acceptable unpaid skills test.

You can also ask an applicant to complete a skills test exercise at home. You will generally want to make sure that the amount of time it will take to complete the exercise will be reasonable – around an hour or so, not a full day. Typically, only finalists for the position should be asked to complete such exercises.

Whatever kind of testing you decide to do, there are some general guidelines you should keep in mind. The Uniform Guidelines on Employee Selection Procedures (UGESP) – jointly adopted in 1978 by the Equal Employment Opportunity Commission, the Civil Service Commission, the Department of Labor, and the Department of Justice – provides a framework for determining the proper use of tests and other selection procedures. The guidelines were designed to assist employers, among others, with federal requirements prohibiting employment practices that discriminate on the grounds of race, color, religion, sex, and national origin. The EEOC recommends the following best practices for testing and selection:

  • Ensure that employment tests and selection procedures are job-related and appropriate for your purposes. For example, a proofreading test might be appropriate for an editing position or an administrative assistant job, but it would not be a valid test for an automobile mechanic or an electrician. While a test vendor’s documentation supporting the validity of a test may be helpful if you find your company in litigation, you as the employer are ultimately responsible for ensuring that your tests are non-discriminatory, both in intention and effect.
  • Assess whether your selection procedures unintentionally screen out a protected group – for example people of a certain race or sex. If so, determine whether there is an equally effective alternative selection procedure that has less adverse impact and, if there is one, adopt the alternative procedure.
  • Keep your tests and procedures up-to-date relative to the specific positions. Job duties change over time, and as they change, so should your employment tests and selection procedures. There’s no sense testing for skills if a job no longer requires those skills. Tests and selection procedures should be predictive of success in the job.
  • Make sure whoever develops the tests, purchases them from a vendor, administers the tests, and assesses their results understands the effectiveness, appropriateness, and limitations of the test. Tests can a useful management tool, but managers who use them need to know what they’re doing.

If you want to avoid the hassle of pre-employment testing, another way to get an idea of an applicant’s skill level is to ask follow-up questions during the interview process and request that the applicant provide examples. So, if a candidate says in the interview that they have a particular skill, you could ask them to tell you about a time they used that skill or how they might handle various scenarios that require that skill. You could also pose questions that only someone with that skill would know how to answer.

Source:  HR Support Center

 Posted by at 07:17