The law features a new “substantially similar” standard, strict limits on seeking compensation history, and an affirmative defense for good-faith self-evaluations.
Massachusetts Governor Charlie Baker has signed into law a pay equity bill geared toward closing the gender wage gap and ensuring equal pay for “comparable work.” The law passed unanimously in the Massachusetts House and Senate after receiving support from both business and women’s rights groups.
The new law takes effect on July 1, 2018. Before then, employers should consider changes in a number of hiring, recruitment, and compensation practices. (These changes may also be informed by regulatory guidance from the Massachusetts attorney general, who is empowered to issue regulations under the new law.) As just one example, the new law’s prohibition on seeking compensation history will likely require changes to employers’ job applications. Multistate employers will have to consider how to comply with Massachusetts law if they use standard multistate employment documents. Such employers will also want to make sure that any changes in practices and documents comply with recent equal pay legislation in New York, California, Maryland, and other states.
As the new requirements are clarified, Morgan Lewis will present further LawFlashes, webinars, and seminars with the latest best-practice guidance.
In 1945, Massachusetts enacted the first-in-the-nation equal pay law, the Massachusetts Equal Pay Act (MEPA). MEPA prohibits all public and private employers from discriminating in the payment of wages between men and women and from paying any employee less than the rate paid to employees of the opposite sex for work of like or comparable character or work on like or comparable operations. The new legislation updates MEPA, deploying five key provisions to seek to eliminate the gender wage gap.
|seniority (provided, however, that time spent on leave because of pregnancy-related conditions and protected parental, family, and medical leave, shall not reduce seniority);
|a merit system;
|a 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.
Notably, the law also creates a special committee charged with analyzing the causes and effects of pay disparity on protected classes in addition to sex, such as race, national origin, sexual orientation, and gender identity. The committee must submit its findings to the Massachusetts House and Senate by January 1, 2019.
The law creates an affirmative defense for employers that engage in a good-faith self-evaluation of their pay practices and can demonstrate that they have made reasonable progress toward eliminating wage or compensation differentials based on gender for comparable work. An employer that has not completed a self-evaluation is not subject to a negative or adverse inference because of not doing so.
As a result, developing and implementing an appropriate and reasonable self-evaluation may be helpful to avoid and, if necessary, defend against a legal action and limit damages exposure. Employers may design their own self-evaluation, provided that it is reasonable in detail and scope in light of the employer’s size. Otherwise, an employer may conform its evaluation to templates, forms, and guidance to be issued by the Massachusetts attorney general. If an employer completes a self-evaluation but cannot demonstrate that the evaluation was reasonable in detail and scope, the employer will not be entitled to the affirmative defense but also will not be liable for liquidated damages.
The law limits the use as evidence against employers of their self-evaluations and remedial steps. Such evidence is inadmissible to prove a violation occurring prior to the date the self-evaluation was completed or that occurred (1) within six months thereafter or (2) within two years thereafter, if the employer can demonstrate that it has developed and begun implementing in good faith a plan to address gender-based wage differentials for comparable work.
Last, the law provides that an employee’s previous wage or salary history cannot be used as a defense to an action. Furthermore, an agreement between an employer and any employee to work for less than the wage to which the employee is entitled is no defense to an action.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Grace E. Speights