Pay Equity Rules

Published Wednesday, November 28, 2018

The Bureau of Labor and Industries (BOLI) published the final rules for the new Equal Pay Law (HB 2005) on November 19. The rules, while slightly modified, are substantially the same as the drafts we first saw during the rulemaking advisory committee and the proposed rules that were published on August 28, 2018. The new rules are effective January 1, 2019.

The rules provide some flexibility to employers with regards to work of comparable character. While the rules include many factors for work of comparable character, no single factor is determinative of work of comparable quality. The rules do include examples of the factors. BOLI deleted language that had been in the proposed rules stating that, “minor differences in knowledge, skill, effort, responsibility, and working conditions will not prevent jobs from being comparable.” During the rulemaking process, OBI urged BOLI to give employers more flexibility in making such determination. We believe this change in the rule reflects that advocacy.

Similarly, BOLI modified the rules that define bona fide factors for pay differential. Those rules now state factors but recognize that the list is not exhaustive. For example, the rules now have language stating that “education considerations may include, but are not limited to, substantial knowledge acquired through relevant coursework, as well as any completed certificate or degree program.” The addition of the “but are not limited to” language gives employers a bit more breathing room to make hiring and pay decisions.

Unfortunately, BOLI has determined they cannot provide guidance to employers about how to conduct a pay equity analysis. Not only have they deleted the language in the rules that provided extremely limited guidance, but the agency has indicated they won’t be providing employers with any guidance with regards to equal pay analyses. The final rules leave us only with the statute’s language that an equal pay analysis is “an evaluation process to assess and correct wage disparities among employees who perform work of comparable character.

BOLI provided this statement: Some provisions in the new law, like that which restrict court awards of compensatory and punitive damages against employers that perform pay-equity analyses, are outside BOLI’s jurisdiction and are not covered by these rules. BOLI has no rulemaking authority over these analyses, and the legislature was silent on how they should be conducted. With no clear legislative intent and no jurisdiction to oversee these analyses, this was not an appropriate area for rulemaking by BOLI.

As we look towards the 2019 session, OBI will be developing and supporting efforts to amend the law so that employers have more time and resources to help them comply with this highly complex law.