On August 1, 2016, the Massachusetts legislature unanimously enacted its Act to Establish Pay Equity (the “Act”). Following a national trend, as demonstrated by similar acts recently passing in California and New York, Massachusetts has signed into law the most expansive pay equity law in the United States. For more information on New York’s Women’s Equality Act, please see our explanation of its provisions here, and our brief summary here.
Prominent provisions of the Massachusetts Act include a mandate that men and women be paid the same amount for “comparable work,” and a prohibition on using a candidate’s salary history in the hiring process. The Act will become effective on January 1, 2018, giving employers ample time to consider all of the changes they may need to make within their workforces.
Although employers are already required to provide men and women with the same compensation for the same job under the Federal Equal Pay Act and Title VII of the Civil Rights Act, the Massachusetts Act goes multiple steps further by filling in the gaps with defined terms and increased transparency requirements.
Previously, the Massachusetts Equal Pay Act (MEPA) required employers to provide equal wages to employees for “comparable work;” however, MEPA did not define exactly what this term meant. The new Act sheds considerable light on the meaning of “comparable work,” defining it as work done with substantially similar skill, effort, and responsibility under substantially similar conditions. The Act also specifically notes that “comparable work” may not be determined solely based on an individual’s job title or job description; instead, employers must look towards the specific duties assigned to each employee.
Under the Act, variations in wages are allowed if an employer has a system that rewards employees based on seniority, provided that seniority will not be reduced based on a pregnancy-related condition or protected parental, family, or medical leave. Wage differences are also permitted based on merit systems, job location, and relevant experience or training.
Through the passing of this Act, Massachusetts has become the first state to prohibit employers from inquiring about applicants’ previous compensation before offering them a job. Compensation includes wages and salaries, as well as any benefits the employee may have received in a previous position. Employers are also prohibited from reaching out to applicants’ previous employers in order to obtain information about a particular applicant’s compensation history. However, employers are still able to obtain salary and benefit information through any publically available source.
Applicants are able to voluntarily provide information about previous wages and benefits. If an applicant chooses to do so, then the employer must obtain written authorization from the prospective employee and provide the applicant with an offer of employment that includes compensation before the employer can seek out information to confirm what the applicant has reported.
By including this provision, the Massachusetts Act hopes to encourage employers to provide perspective employees with a compensation figure based on what the individual is bringing to the employer, instead of basing it on what she or he earned at a previous job. Since many employers set salaries for new employees based on previous earnings, preventing employers from inquiring about an employee’s previous compensation will help set a more objective wage that is not based on the applicant’s prior earnings.
The Act also prohibits employers from implementing pay secrecy policies or otherwise preventing employees from discussing their wages and benefits with other colleagues, or inquiring about other’s compensation. Employees who seek out information relating to their colleagues’ pay are not only allowed to ask questions, but they are also protected from any sort of retaliation relating to the requests. Employers are further prohibited from “discharg[ing] or in any other manner retaliat[ing] against any employee” for speaking out against an employer’s practices; assisting in investigations of the employer; and disclosing their own compensation or asking about that of other employees.
Penalties for violations under the Act increase dramatically; therefore, preparation is key for employers. By completing a good faith self-evaluation of their pay practices, and demonstrating that they have taken reasonable efforts towards remedying gender pay disparity within their workforce, employers may be able to defend against pay discrimination claims. There are no requirements as to what the self-evaluation must contain; however, they must be “reasonable in detail and scope” depending on the size of the employer, or they must be “consistent with standard templates.”
Equal pay continues to be a prominent topic for discussion in state legislatures. As more pay equity laws are passed, employers need to remain up-to-date on how they can be compliant in the states where they operate. Although Massachusetts tends to be very protective towards its employees, other states may look to this new pay equity Act in the future as a model for their respective equal pay laws.
This blog post was written by Elizabeth Driscoll, a law clerk at Jules Halpern Associates LLC.