Massachusetts Enacts Groundbreaking Pay Equity Law

HIGHLIGHTS:

• Massachusetts has enacted the most expansive pay equity law in the country, following a national trend towards stricter protections against gender discrimination in the workplace.
• The new law, which amends and expands the Massachusetts Equal Pay Act, takes effect on July 1, 2018.
• The law defines "comparable work" for which employees must be paid equally regardless of gender, enlarges the statute of limitations and remedies for unequal wage claims, prohibits pay secrecy policies, and makes Massachusetts the first state to prohibit employers from requiring that job applicants disclose their salary history.

Massachusetts enacted the most expansive pay equity law in the country on Aug. 1, 2016. The law, which the Massachusetts legislature passed unanimously, amends and expands the Massachusetts Equal Pay Act (MEPA), defining "comparable work" for which employees must be paid equally regardless of gender, enlarging the statute of limitations and remedies for unequal wage claims, prohibiting pay secrecy policies and making Massachusetts the first state to prohibit employers from requiring job applicants to disclose their salary history. The Massachusetts pay equity law follows a national trend towards stricter protections against gender discrimination in the workplace. The new law takes effect on July 1, 2018.

New Law Highlights

Massachusetts employers will not be able to rely solely on job titles or descriptions to defend pay disparities among employees performing comparable work. Under the current version of MEPA, employers are prohibited from discriminating against employees in the payment of wages based on gender for comparable work. "Comparable work" was previously undefined and narrowly interpreted by the courts, making it difficult for employees to prove gender discrimination by comparing compensation with co-workers. The new law establishes a definition for "comparable work," which includes "work that is substantially similar" in "skill, effort and responsibility and is performed under similar working conditions." While it remains to be seen how the courts will apply this definition to particular circumstances, having a statutory definition should provide needed clarity and consistency.

Importantly, wage differences are permissible under the pay equity law if based on seniority, a merit system, a system that measures earnings based on quality or quantity of production or sales, geographic location, education, training, experience or travel.

A novel feature of this equal pay law is the prohibition on employers requiring job applicants to disclose their pay history. Prospective employees may still disclose such information voluntarily, and if they do, then employers may confirm the pay history. The law also requires employers to eliminate pay secrecy policies, which prevent employees from discussing their compensation with other workers.

The law expands the remedies available to plaintiffs by extending the statute of limitations from one year to three years, and creating a continuing violation provision under which a new violation of the law occurs each time an employee is paid an unequal amount. This provision may permit employees to recover years of back pay discrepancies as well as liquidated damages. There is no requirement that an employee file first with the Massachusetts Commission Against Discrimination (MCAD). Lawsuits may be filed directly in court.

In an employer-friendly measure that is unique to Massachusetts, an affirmative defense is available to employers who have completed a good faith self-evaluation of pay practices and can demonstrate that progress has been made toward eliminating gender pay gaps. Employers may not, however, reduce wages of employees to correct pay disparity.

Considerations for Employers

Before the new pay equity law takes effect on July 1, 2018, Massachusetts employers should take proactive measures to ensure compliance, including review of hiring, compensation and confidentiality policies and procedures. Employers should also conduct self-evaluations of pay policies and pay disparities between men and women performing comparable work, and not rely on job titles and descriptions that might be out of date or otherwise not match the work actually being performed. Such self-evaluative measures may improve workplace conditions and limit legal risk.

For more information, please contact the authors or another member of Holland & Knight's Labor, Employment and Benefits Group.   

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.