Amended Massachusetts Equal Pay Act Goes Into Effect July 1, 2018

Effective July 1, 2018, Massachusetts joins a growing number of states around the country moving to close the gender wage gap by implementing the Massachusetts Equal Pay Act. The Act applies to every employer and ensures equal pay for “comparable work” among men and women. With it comes significant changes in the way employers hire, recruit, develop and implement compensation practices in the workforce. For example, the new law prohibits employers from seeking salary history and will likely require changes to job applications. Multistate employers will need to consider how to comply with Massachusetts obligations that may differ from other states.

This Alert highlights some key provisions of the new law including:

  • Equal pay for comparable work that is “substantially similar”;
  • Factors that may legally justify variations in wages;
  • Prohibition against salary history inquiries and secret pay policies;
  • Self‐Evaluation audits as a defense; and
  • Penalties for violations of the law.

Recently, the Massachusetts Attorney General’s Office, which enforces the Act, issued long‐awaited guidance that clarifies some obligations under the law.

Equal Pay for Comparable Work
The Act requires equal pay for comparable work and prohibits employers from relying solely on a job title or job description to determine whether work is comparable. “Comparable work” is defined as work that is substantially similar in that it requires substantially similar skill, effort and responsibility, and is performed under similar working conditions. Any gender‐based variance is prohibited, however, the Act does permit differences under certain, limited circumstances discussed below.

Legal Variations Permitted
Wage variations are permitted if based on:

  • seniority system (provided, however, that time spent on leave because of pregnancy‐related conditions and protected parental, family, and medical leave, shall not reduce seniority);
  • merit based system – must be based on legitimate, job‐related criteria;
  • system that measures earnings by quantity or quality of production, sales, or revenue geographic location in which a job is performed;
  • education, training, or experience to the extent that such factors are reasonably related to the particular job in question; or
  • travel, if the travel is a regular and necessary condition of the particular job.

Salary History Inquiries Prohibited
Employers can no longer ask candidates for information about their prior compensation, nor can they seek such information from any current or former employer. Employers can instead ask candidates what they would like to get paid for the position. However, employers should proceed with caution in doing so, and should not ask follow‐up questions that might prompt the candidate to disclose his or her salary history. Employers can also ask about the volume or quantity of a candidate’s prior sales objectives and whether or not she or he met those objectives, as long as the questioning does not include asking about the candidate’s past earnings through sales. Employers may only confirm past salary prior to offering employment if a prospective employee voluntarily discloses such information. The prohibition does not apply to current employees who seek an internal transfer or promotion. Absent a candidate’s voluntary disclosure, no such inquiries are permitted.

In addition, internal policies prohibiting discussion of salaries between and among existing employees are prohibited.

Self-Evaluation Audits
Employers that engage in a good‐faith self‐evaluation of their pay practices and can demonstrate that reasonable progress has been made toward eliminating pay disparities based on gender, are protected against any and all liability and damages so long as the audit was performed and completed in the three years prior to any lawsuit. If the self‐evaluation is not reasonable in detail and scope, but meets all other requirements, the employer has a partial defense that allows it to escape liability for liquidated damages. Simply cutting pay of men to equalize the pay scale is not permitted.

Penalties and Damages
Employers who violate the law can be sued, and if found liable, must pay any unpaid wages plus an additional amount equal to 100% of the unpaid wages as liquidated damages. In addition, the Act subjects employers to costs, interest and reasonable attorneys’ fees which can add up quickly. Aggrieved employees must bring suit within three years of any violation and can either file a claim with the Attorney General or go directly to court. The Act also allows class actions for similarly situated employees. A violation occurs at each pay period the offending pay disparity is made, making it easier for employees to file claims.

Conclusion
Employers should immediately review their hiring, recruitment, and compensation practices and policies to make sure they are compliant with the Act. While the Attorney General’s guidance is not binding law, it provides employers with greater clarity on many areas, demonstrates how the law may be interpreted broadly, and highlights the important role employer self‐evaluations will play in defending against claims under the Act.

This Employment Law Alert is intended to keep readers current on matters affecting employment law and is not intended to be legal advice. If you have any questions, please contact Walter Foster at 617.342.6853 or wfoster@eckertseamans.com.

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Authors

Walter M. Foster

Member - Boston

Caitlyn M. Bosworth

Associate - Boston

Rachel E. Moynihan

Associate - Boston