New Pay Equity Law Throws City Of Portland Into Confusion

Earlier this week, the Portland Bureau of Human Resources sent emails to city employees detailing how a new state pay equity law would affect them. The law went into effect Jan. 1.

The bureau notified 518 city employees they would see a change in pay as a result of the Oregon Equal Pay Act of 2017, while another 869 were told they would not.

But 1,219 city employees — including Portland Police Chief Danielle Outlaw and now-resigned Fire and Rescue Chief Mike Myers — were also told in an email that they were being “red circled."

That means they would, at least temporarily, not receive pay raises based on merit or even cost of living increases while the city attorney and human resources directors work with the City Council on how to remain compliant with the law. Employees whose rate of pay was found to be above “justified salary” — determined by comparing factors like seniority, experience, education and merit — were red-circled.

The city's human resources department stresses the pay freeze is just a temporary measure.

"We wanted to freeze every person that was impacted by the analysis and changes of compensation as a result of the pay equity legislation," said Serilda Summers-McGee, chief human resources officer for Portland. "We didn’t want any additional adjustments in compensation to occur, until we speak with Council about remaining in compliance."

The Bureau of Human Resources is in Mayor Ted Wheeler's management portfolio. Wheeler's communications director referred questions to the human resources department on Thursday and hadn't responded to follow up questions as of Friday afternoon.

The emails bewildered some city employees, who were surprised by abrupt communications regarding changes in pay as a result of the law, and city leaders appeared to be caught flat-footed.

Emails sent to city employees explaining the new law and how it would affect employees' pay raised questions about how prepared the state and employers — including Oregon’s most populous city — were in implementing the law.

“We understand that it would have been better to have more time and provide you with more information before the pay equity decision emails were sent out,” read an email sent to city staff this week explaining earlier communications regarding pay changes.

“BHR staff were literally working up to the last minute to implement the changes before midnight, December 31st," the email said. "That said, you told us you wanted more transparency, more consistency, and more proactive approaches to the services we provide. We know this multi-bureau process did not meet those expectations.”

The problem at the city of Portland occurred in part because of how long it took state regulators to come up with rules for employers regarding compliance with the law, which the governor signed in June 2017, according to Marshall Runkel, chief of staff to Commissioner Chloe Eudaly.

State regulators didn’t issue the administrative order and rules for the law until Nov. 19, 2018. Those rules outlined implementation of the law and included definitions, work of comparable character, exceptions and posting notices.

In December, the Portland Tribune reported on a meeting in which legislators grilled regulators with the state Bureau of Labor and Industries for dragging their feet on finalizing rules for the new law.

As a result, 15 heads of city bureaus and offices will have their pay "red circled." That means more than half of all top city managers — nearly 70 percent — were told in an email that they were no longer eligible for pay or cost of living increases while the city determines how it will keep in compliance with the law. Myers, the former head of the Fire Bureau, resigned the same week the emails were sent to staff.

“I think it would be hard to overstate how big a problem it is for morale,” Runkel said. “A motivated workforce is key to success in any endeavor. So I think we stepped in it with our workforce on this issue, and we need to correct.”

Runkel and other chiefs of staff are working to solve the communications breakdown ahead of a planned meeting on the issue among city commissioners next week. While Runkel thinks the goal of the equal pay law is laudable, he says it was poorly executed by state and city leaders.

“That’s not the ideal way for an employer to communicate with employees,” Runkel said, adding the city email lacked context and explanation.

For its part, BOLI said it was never directed or given the resources to communicate with employers on a mass scale about the new law.

“So what we have done is get ourselves ready to do enforcement through our civil rights division because under this law, employees can go to BOLI with a complaint,” said Christine Lewis, legislative and communications director with BOLI.

“The only thing that the Legislature directed us to do was to make a poster, and help with the required posting."

Lewis added that BOLI is not responsible for mass enforcement or spot checking; she said adding the law had only created a “complaint-driven process.”

Leila Wall, a training and development specialist with the technical assistance for employers program at BOLI, said her team has been conducting seminars with hundreds of employers since mid-2018.

This story may be updated.