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Oregon’s Pay Equity Law Must Allow Employers to Pay Different Rates Where Specified by a Government Contract: Part 6 of 6

February 5, 2019

Overview

The 2019 Oregon legislature should revise Oregon’s equal pay law to allow employers to pay employees performing comparable work differently where a government contract specifies pay rates.  Several laws require that government contractors pay certain prevailing wages to workers.  The contracts usually specify the rates that the employer must pay.  Those rates are set when the employer bids on the project.  Therefore, the employer may bid on a project to carry fuel for the government in 2016, but not perform the contract until 2018.  The employer will pay the rates established at bid in 2016.  Because of this, a contractor may be performing under two contracts simultaneously that require the payment of different wages. 

For example, a manufacturer may have two different government contracts to build tanks for the military that were bid in different years and, therefore, require the employer to pay different prevailing wage rates.  If those two contracts were performed in the same year, the workers on one project would earn different wages than the workers on the other project.  If the employer paid the workers according to those contracts, it could violate Oregon’s equal pay law. 

As another example, a construction contractor might build a public project for the federal government across the street from a commercial building that it is building for a private developer. The government contract will require that the contractor pay the federal prevailing wage rates, which tend to be significantly higher than wages paid in the private sector.  Under Oregon’s pay equity law, the contractor may be required to pay the workers on both projects the federal prevailing wage rate.  If the law requires this outcome, no contractor could build both public and private projects because the contractor would be forced to bid on private sector jobs using the federal prevailing wage rates to avoid the scenario above.    

To avoid these bizarre outcomes, the 2019 Oregon legislature should fix the law to allow employers to pay employees differently if the difference is based on rates set in a government contract.

One article in a six-part series on BOLI’S Equal Pay Act.

Part 1 of 6: Oregon Legislature Should Fix BOLI’s Unfair Pay Equity Rules

Part 2 of 6: Oregon’s Pay Equity Law Encourages Invasions of Privacy

Part 3 of 6: Oregon's Equal Pay Law Encourages Systemic Discrimination

Part 4 of 6: Oregon's Equal Pay Law Should Allow Employers to Accommodate Injured Workers

Part 5 of 6: Oregon’s Pay Equity Law Should Allow Employers to Pay a Travel Incentive

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