On July 1, 2018, an updated equal pay law will go into effect in Massachusetts, which applies to nearly all employers who have employees in this state. The Massachusetts Equal Pay Act (MEPA), amends the current statutory prohibition against gender-based pay inequity by strengthening the protections offered to employees.
The MEPA makes it illegal for an employer to pay employees of one gender lower compensation than another gender for comparable work. The law defines "comparable work" as work that requires substantially similar skill, effort and responsibility, and is performed under similar working conditions. This differs from prior law in that courts first required proof that the jobs were comparable in terms of their "substantive content" before addressing other questions; this change will likely result in allowing employees to compare themselves to a broader class of other job positions to prove a violation of the new statute.
No Salary History. No Retaliation.
- The new law prohibits employers from asking job candidates about their salary history. MEPA makes it unlawful for an employer to "seek the wage or salary history of a prospective employee from the prospective employee or a current or former employer or to require that a prospective employee’s prior wage or salary history meet certain criteria…." This means that hiring managers can no longer ask about salary history when interviewing candidates or negotiating compensation arrangements. However, if a candidate volunteers this information, the employer may seek to confirm the information after making a conditional offer of employment that includes a compensation amount.
- The MEPA also prohibits employers from retaliating against employees who discuss details of their or anyone else’s compensation to other employees.
- An employer who pays a wage differential in violation of the MEPA may not correct the disparity by reducing the wages of any employee solely to comply with the law.
- An intent to discriminate based on gender is not required to establish liability under the new law.
The new law is not a blanket ban on compensating employees differently in a comparable job, as long as the employer does so on the basis of at least one of six objective factors:
- A seniority system (that does not take into account an employee’s pregnancy or parental-related leave)
- A merit system
- A system that measures earnings by quantity or quality of production, sales, or revenue
- Geographic location
- Education, training or experience
- Travel, if it is a regular and necessary condition of the job
Multi-state employers should ensure that employees within the same geographic area within Massachusetts are paid equally for performing comparable work, unless excluding out-of-state employees from the analysis is unreasonable under the circumstances. For example, if the only employees performing work comparable to the work performed by a Massachusetts employee are located in another state, it may be necessary to compare the wages of those employees to ensure that they are paid equally, or that any disparities are justified under the law, including by the different geographic locations themselves.
The MEPA provides a defense to a legal claim for any employer that has conducted a good faith, reasonable self-evaluation of its pay practices within the previous three years and before an action is filed against it. To be eligible for this affirmative defense, the self-evaluation must be reasonable in detail and scope and the employer must show reasonable progress towards eliminating any unlawful gender- based wage differentials that its self-evaluation reveals. The employer bears the burden of proving that it has met these standards.
Whether an employer is eligible for an affirmative defense does not necessarily turn on whether a court ultimately agrees with the employer’s analysis of whether jobs are comparable or whether pay differentials are justified under the law; rather, the test will be based on whether the self-evaluation was conducted in good faith and was reasonable in detail and scope.
Next steps for employers in Massachusetts
- Employers should conduct pay audits (self-evaluation) to ensure they are in compliance. Remember, this self-evaluation must be conducted in good faith and be reasonable in detail and scope. The Massachusetts’s Attorney General’s Office has published a checklist and a pay calculator intended to assist employers with conducting self-audits.
- Ensure handbooks and policies are appropriately updated.
- Ensure hiring documents, such as applications, are in compliance.
- Provide training and instruction for managers and employees who perform interviews and interact with job candidates.