On July 1, 2018, the updated Massachusetts Equal Pay Act will go into effect to remedy the continuing gender wage gap between male and female wage earners.
Under the new legislation, all Massachusetts employers are prohibited from paying employees of different genders a different wage for performing comparable work. The law’s scope includes out-of-state employers who have employees with a primary place of work within Massachusetts.
Under existing law, an employer must pay equal wages where jobs are comparable in skill, effort, responsibility, working conditions, and substantive content. For example, while food service work and janitorial work require comparable skill, effort, responsibility, and working conditions, the jobs are not comparable because they are substantively different and therefore, unequal wages between the two jobs is acceptable.
Under the new law, however, comparable work is more broadly defined. Even if two jobs are substantively different, they can be considered comparable, thus requiring equal pay. Thus, a food service job may be considered comparable to a janitorial job if the two jobs require similar skills, effort, responsibilities and working conditions, even though they are substantively different positions. “Wages” includes incentive pay, deferred compensation and the opportunity to participate in benefit programs under the same terms.
The Equal Pay Act permits employers to pay different wages for comparable work if, for example, the difference is based on a seniority or a merit system. An employer may have a qualifying merit system if it has a written performance rating plan or policy that measures employee performance on a set scale from “unsatisfactory” to “exceeds expectations” and takes these ratings into account in setting the employee’s salary.
Do your organization’s pay practices comport with the new law? Making assumptions that they do, without conducting a thorough, good faith self-evaluation is a risk that could prove costly. Violations of the Equal Pay Act can result in aggrieved workers recovering double their actual damages, plus attorneys’ fees and costs.
While employers are not required to conduct self-evaluations, the Equal Pay Act provides a complete defense for employers who, within the previous 3 years and prior to the commencement of any lawsuit brought under the Act, have completed a good faith, self-evaluation of its pay practices and can demonstrate that reasonable progress has been made towards eliminating wage differentials based on gender for comparable work.
The Equal Pay Act also significantly changes what you can and can’t do in interviewing applicants for a job. Specifically, employers are not permitted to ask prospective employees (male or female) about their salary history or require that that salary history meet certain criteria. Employers also cannot forbid employees from discussing their own or other employees’ wages among themselves. Employees who complain about unequal pay for comparable work are protected from any retaliation.
To discuss the law, or the Equal Pay Act’s self-evaluation process and the analysis best suited for your organization, please contact Diane DeGiacomo or Jennifer Carpenter, members of our Employment Law Group.