Oregon Pay Equity Law: Comply With Job Evaluation

Compliance with the Oregon Pay Equity Law can be simple and straightforward (albeit a good bit of work) by following traditional “best practice” job evaluation principles that have been used for decades nationwide, and in a number of FQHCs.  There are many aspects to the Pay Equity Law, but this post focuses on the requirement of job analysis and evaluation – that is, compliance with the requirement that there can be no differences in pay (subject to exceptions to be discussed later) for individuals performing work “of comparable character:”

(17) “Work of comparable character” means work that requires substantially similar knowledge, skill, effort, responsibility and working conditions in the performance of work, regardless of job description or job title, as defined in OAR 839-008-0010.

In each of the five general categories (knowledge, skill, effort, responsibility, and working conditions) there are examples of the types of considerations, e.g,:

(d) Responsibility considerations may include, but are not limited to, the following:

(A) Accountability, decision-making discretion or impact of an employee’s exercise of their job functions on the employer’s business;

(B) Amount, level or degree of significance of job tasks;

(C) Autonomy or extent to which the employee works without supervision;

(D) Extent tow which the employee exercises supervisory functions; or

(E) Extent to which an employee’s work or actions expose an employer to risk or liability.

The text of the rules makes it clear that none of these various considerations need be determinative, nor need they be included, nor are they exclusive.  This essentially means that the employer is free to develop its own model for  determining work of comparable character, so long as it is within the spirit of the regulations (and doesn’t run afoul of any specific one, of course).

The process for doing this is called “job evaluation” and is a “best practice” method of compensation program design. It involves selecting a set of characteristics (such as those described in the rules), creating a set of levels for each, building a scoring model, and then applying it to each job. HR professionals may have run into these kinds of plans if they worked in hospitals, governmental agencies or larger organizations – in those environments they are typically called “classification systems.”  A job evaluation method is used to determine which jobs are assigned to each pay grade, and market data is then applied to create ranges for each grade.

While it is not particularly difficult to design a job evaluation plan (and an accompanying pay structure), it is not something that one should do by simply scouring the internet and downloading samples.  A job evaluation plan must include characteristics that are relevant to the organization, should reflect the organization’s values (e.g., how the various factors are weighted) and be tested statistically.  They also need to be tested and analyzed with relevant labor market data, to ensure that the plan will still allow the organization to be competitive.

Merces has developed dozens of these plan for health centers nationwide. Before you go down the road working with any organization, ensure they have the experience not just with pay equity and job evaluation techniques, but an understanding of how they work in the industry.

About Edmund B. Ura

Edmund B. Ura, MAIR, JD, works with governing boards, executives and human resources staff to develop methodologies for ensuring fair and equitable compensation programs that support achievement of organizations' missions. Contact Ed at ebura@mercesconsulting.com.
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