United States: Massachusetts Adds Teeth To Equal Pay Obligations

On July 23, 2016, the Massachusetts Legislature passed the Act to Establish Pay Equity (the "Act").1 The stated purpose of the Act is to increase wage transparency and bridge the gender gap with regard to wages. Governor Baker stated that he intends to sign the Act next week. If he does so, the Act will take effect on January 1, 2018. When it takes effect, Massachusetts will have one of the most expansive equal pay laws in the Nation. In addition, by limiting the amount of wage-related information employers may obtain from job applicants, the Act may force employers to revise their job applications to eliminate requests for applicants' pay history.

History of Equal Pay in Massachusetts

In 1945, Massachusetts became the first state to enact a law requiring equal pay for comparable work performed by men and women. The law, however, was rarely used or enforced. This was due, in part, to the fact that the term "comparable work" had been defined narrowly: in order to be "comparable," two jobs had to have similar duties and require comparable skill, effort, responsibility, and working conditions. Indeed, despite the existence of this law, studies have found that a pay gap between the sexes persists. The stated purpose of the Act is to eliminate this gap.

Requirements Under The New Law

The Act makes it generally illegal for an employer to pay employees compensation at a lower rate than the rate paid to employees of a different gender for comparable work. The law eliminates the requirement that "comparable work" involve similar duties. Instead, under the new law, comparable work is "work that is substantially similar in that it requires substantially similar skill, effort, and responsibility and is performed under similar working conditions." The law also provides that "a job title or job description alone shall not determine comparability." Thus, under the Act, "comparable work" is not limited to employees who have the same job title. Indeed, the phrase "work that is substantially similar in that it requires substantially similar skill, effort, and responsibility and is performed under similar working conditions" is so vague that employers will have difficulty determining which jobs to compare for purposes of complying with the Act.

Although the Act's prohibition on unequal compensation is broadly worded, it also contains important affirmative defenses for employers – defenses that were not available under the old law. Under the new law, an employer is not liable if it can demonstrate that a pay difference for comparable work is based on one or more of the following factors:

  1. a bona fide seniority system; provided, however, that time spent on leave due to a pregnancy-related condition and protected parental, family and medical leave, shall not reduce seniority;
  2. a bona fide merit system;
  3. a bona fide system that measures earnings by quantity or quality of production or sales;
  4. the geographic location in which a job is performed;
  5. education, training or experience to the extent such factors are reasonably related to the particular job in question and consistent with business necessity; or
  6. travel, if the travel is a regular and necessary condition of the particular job.

Employers may not reduce the pay of any employee in order to comply with the Act.

The Act also provides a "self-evaluation" defense for employers. Under the Act, employers who complete a good faith self-evaluation of their pay practices within three years of a claim, and can demonstrate that "reasonable progress has been made towards eliminating compensation differentials based on gender," have an affirmative defense to liability for an equal pay violation. The self-evaluation may be of the employer's own design, so long as it is reasonable in scope or detail in light of the size of the employer or consistent with standard templates or forms issued by the Attorney General.

The Attorney General has not yet issued self-evaluation templates or forms, but will hopefully post this information on its website before the Act goes into effect. Evidence of an employer's self-evaluation or remedial steps undertaken in accordance with the Act cannot later be used as evidence of a violation, so long as the evaluation was completed prior to the alleged violation or within six months thereafter.

Restrictions on Wage Disclosure

In addition to the equal pay requirements described above, the Act also significantly limits an employer's ability to control the flow of information regarding employee wages.

Specifically, the Act makes it illegal for an employer to: (1) require that an employee refrain from inquiring about, discussing or disclosing information about the employee's own wages, or any other employee's wages; (2) screen job applicants based on their wages; (3) request or require an applicant to disclose prior wages or salary history; or (4) seek the salary history of any prospective employee from any current or former employer, unless the prospective employee provides express written consent, and an offer of employment – including proposed compensation – has been made. An employer may, however, prohibit human resources employees, or any other employee whose job responsibilities require access to other employees' compensation information, from disclosing such information. The new law also contains anti-retaliation provisions for any employee who opposes an action or practice made illegal under this section.

Damages and Enforcement

The Act provides for a private right of action. Unlike Massachusetts General Law Chapter 151B, the Massachusetts law prohibiting discrimination in the workplace, plaintiffs who wish to pursue claims under the Act are not required to file a complaint with the Massachusetts Commission Against Discrimination before filing in court. A prevailing plaintiff may recover damages (i.e., the difference between the wages she earns and the wages earned by her comparator), as well as an equal amount in liquidated damages. Prevailing plaintiffs also may recover reasonable attorney's fees and costs. Additionally, the Attorney General may bring a cause of action under the Act.

The Act provides that plaintiffs may file a claim within three years of a violation. The law makes clear that an equal pay violation occurs each time an employee is paid, effectively resetting the three-year limitation period after each paycheck.

Recommendations for Employers

Once the Act becomes effective in 2018, employers will likely begin to see more complaints filed in court alleging a failure to provide equal pay, as well as separate enforcement actions by the Attorney General. Implementing a formal self-evaluation process into pay policies every three years is a crucial step for employers that wish to avail themselves of the affirmative defense under the Act. While employers wait for guidance from the Attorney General on how to conduct these self-evaluations, there are several things employers should consider before the Act goes into effect:

  1. The Act prohibits employers from requesting or requiring an applicant to disclose prior wages or salary history. As a result, employers should consider reviewing and revising job applications and related forms to comply with those restrictions.
  2. The Act requires that employers post a notice informing employees of their rights under the new law. It is possible that the Attorney General will issue a sample poster prior to the Act going into effect in 2018.
  3. Given the various prohibitions contained in the Act, employers may need to train recruiters, and employees who interview or screen applicants, regarding the impact of the new law. Similarly, employers will need to review existing personnel policies and employee handbooks to ensure compliance with the Act's provisions regarding the disclosure of wage-related information. Among other things, employers will need to eliminate any blanket prohibitions on an employee's discussion of compensation-related information with other employees.
  4. Employees who make decisions regarding compensation may need to be trained on the Act's requirements, including the factors that may constitute a defense to a claim that an employee is not receiving equal pay for comparable work.
  5. Employers should consider whether to audit their existing pay rates now, prior to receiving guidance from the Attorney General, to determine whether those rates may be susceptible to challenge once the Act goes into effect. Any employer contemplating such an audit also should consider whether an audit could or should be subject to the attorney-client privilege.
  6. Employers should consider implementing an adequate internal complaint procedure to bring to light and address any equal pay issues.

As discussed above, the Act imposes a number of significant changes on employers' pay practices. We currently anticipate that, once the Act goes into effect, both the Attorney General's Office and the plaintiffs' bar will begin investigating and asserting claims under the new law. As a result, it is important that employers reach out to employment counsel to ensure compliance with this new law before it goes into effect.

Footnote

1. Information on this bill is available on the Massachusetts Legislature's website: https://malegislature.gov/Bills/189/Senate/S2119.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Christopher B. Kaczmarek
Joseph A. Lazazzero
Similar Articles
Relevancy Powered by MondaqAI
McLane Middleton, Professional Association
Ogletree, Deakins, Nash, Smoak & Stewart
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
McLane Middleton, Professional Association
Ogletree, Deakins, Nash, Smoak & Stewart
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions