Lawmakers say a bill to increase payroll transparency in Oregon effectively died in this legislative session after Legal analysts said the proposed law could be struck down as a violation of freedom of expression.
Senate Bill 925 He would have required employers to include an hourly rate or salary range in job listings.
While sponsors say the proposed law was intended to create a fair, equitable and competitive labor market, its principal sponsors said they have been told that SB 925 may not stand a challenge under Oregon’s free speech provisions, which are stronger than those in the US Constitution.
Ken Trung, chief of staff to Sen. Case Gamma, D-Portland, one of the bill’s lead sponsors, said legislative attorneys, the Oregon Department of Justice and the American Civil Liberties Union of Oregon have raised concerns that requiring employers to disclose salary ranges in job postings could be considered “speech.” forcibly” by the government.
Courts have determined that the First Amendment to the United States Constitution and Section 1 of the Oregon Constitution protect the right to free speech as well as the right not to speak except in very limited circumstances.
The bill would also have required employers to provide each worker with a compensation range and description of benefits for employees who hold the same position annually, at the time the employee is hired or if they change positions.
Lawmakers are still considering another bill, House Bell 2800This would make it illegal for employers to include certain words or phrases on job applications that could lead to age discrimination. For example, employers will be prohibited from saying that job applicants must be “digital natives” because it indicates an age preference, Trong said.
In a letter to Sen. Daniel Bonham, R-Dalles, the Legislative Counsel Committee said the state can only force it to speak when it seeks to avoid a specific “impact or harm.” However, the legislative advisor did not believe that SB 925 presented this case as written.
Truong said the latest iteration of the bill does not include grounds to require employers to disclose salary information in job postings, such as addressing issues of equality, unfair pay, or discrimination.
“With the deadlines and everything else going on, we just wanted to pause the bill and spend more time in the meantime to continue developing it,” he said. “It was a tough decision, but our office thought it was best to re-evaluate.”
Trong said the bill’s co-sponsors do not believe the policy is unconstitutional but that the language of the bill needs to be revised to address potential legal challenges.
The DOJ did not oppose SB 925 or indicate that it should not move forward, said Ellen Klim, director of consumer outreach and education for the Oregon Attorney General’s Office. She said the Justice Department’s role was simply to help lawmakers find pitfalls in the proposals.
Trong said the Justice Department has suggested that lawmakers could remove the key provision of the bill, to require employers to include salary ranges in job advertisements. But he said the law’s sponsors don’t think they have time to review the law and move forward before the legislative session ends in June.
Meanwhile, other countries are already forcing companies to put their cards on the table. Colorado made this move in 2019Require employers to include compensation in job advertisements and notify employees of promotion opportunities. A similar provision entered into force in New York City In November 2024, New York’s governor signed into law a bill in December that would require payroll disclosures at the state level.
California and Washington have begun requiring companies with at least 15 workers to include salary ranges on job listings. California law also requires large private employers to report average pay by job class, race, ethnicity, and sex, and bars employers from asking job applicants about their pay history.
In all, more than 25% of workers in the United States now live in a place with a salary transparency law, according to a new law. Analysis by the National Women’s Law Center.
Sen. Wlnsvey Campos, D-Aloha, one of the primary sponsors of SB 925, said in written testimony that the proposed law is intended to protect job seekers during the hiring process.
That hasn’t happened, Campos said in testimony submitted for a public hearing and business hearing last week: “Withholding information on the pay rate and benefits for a job is expelling diverse candidates from jobs for which they are qualified and able to do.” “Without this transparency, unfair pay structures and a lack of trust are all too common.”
The bill was supported by unions, such as the American Federation of State, County, and Municipal Employees, the American Federation of Labor, and the Oregon Congress of Industrial Organizations.
“Adding salary ranges to job listings helps companies attract and retain talent,” Odalis Aguilar, political coordinator for the Oregon AFSCME, said in written testimony, in addition to closing gender pay gaps.
“Pay secrecy can cause hostile work environments among employees and can cause turnover within a company,” Aguilar said, adding that disclosing pay ranges and employment benefits for open positions is already common practice.
Oregon Business & Industry opposed the legislation, arguing that SB 925 did not comply with wage disclosure requirements in neighboring states and would “impose large burdens on small businesses.” As drafted, the bill would require every Oregon company, regardless of size, to list a pay range and benefits for any job opening, while wage range transparency requirements in Washington and California only apply to employers with at least 15 workers.
Derek Sangston, the business group’s policy director and consultant, said in written testimony that the requirement that employers give workers annual notices of their pay would be redundant because they are already required to provide workers with W-2 tax forms.
“The bill would also call for dual enforcement by both the Labor Office and industries through civil penalties and individuals through a special right to work,” Sangston said. “While the OBI would be comfortable with BOLI’s enforcement, the OBI is concerned that allowing SB 925 to be enforced through a private right to work would have drastic implications for both Oregon businesses and the court system.”
Sangston said OBI is concerned the bill will also undermine employers’ ability to hire and open them up to litigation if the payroll is incorrect in the job listing.
Other opponents of SB 925 have provided written testimony that the bill is onerous and will negatively affect small business owners, as it will increase costs and increase the likelihood of litigation.
– Christine De Leon; [email protected]