United States: Massachusetts Governor Signs Stringent Pay Equity Requirements, Effective In 2018

Seyfarth Synopsis: On August 1, 2016, Massachusetts Governor Charlie Baker signed a bill that will amend the Commonwealth's pay equity law effective in 2018. The changes will make the law one of the most stringent in the country and will impose new restrictions on employers' pay and hiring practices.

On August 1, 2016, Massachusetts Governor Charlie Baker signed into law major changes to the Massachusetts Equal Pay Act, Mass. General Laws c. 149 section 105A. As previously discussed here, the House and Senate passed different versions of the amendment, which were resolved in committee. The new law will take effect in 2018 and will be enforced by the Massachusetts Attorney General's Office. Employees also will have a private right of action.

New Justifications for Wage Differentials

The existing Massachusetts pay equity statute requires "equal pay" for "equal work." The new law, in contrast, will prohibit differences in pay for "comparable work," which 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." This "comparable work" standard will expand employers' obligations to ensure equal pay across different jobs in ways that are difficult to predict, as the standard is vague and will have to be applied by courts in litigation after the new law takes effect. While the Attorney General may promulgate regulations to interpret the term, she is not required to do so, and there is no timetable for any such regulations to be issued.

Under the new law, an employer can avoid liability for a wage differential between employees of opposite genders only if it can establish that the difference is based on one of the following factors:

  • a system that rewards seniority; provided, however, that time spent on leave due to a pregnancy-related condition and protected parental, family and medical leave, shall not reduce seniority
  • a merit system;
  • a system which 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 such factors are reasonably related to the particular job in question; and
  • travel, if the travel is a regular and necessary condition of the particular job.

As with the definition of "comparable work," these terms are each amenable to a range of interpretations. For example, it remains to be seen how detailed or regimented an employer's practices must be in order to qualify as "a system that rewards seniority" or a "system which measures earnings by quantity or quality." An employee's previous wage or salary history is not a defense to a claim of wage discrimination, and unlike federal law, the Massachusetts statute has no catchall defenses for wage differentials based "any factor other than sex."

The new law also prohibits employers from reducing the wages of any employee in order to eliminate wage differentials.

"Wages" are defined broadly to include "all forms of remuneration for employment."

Wage Disclosures and Requests

In one of its most unique provisions, the new law will prohibit Massachusetts employers from requesting the compensation history of a prospective employee prior to making an offer, unless the prospective employee has "voluntarily" disclosed such information. This makes the Massachusetts statute one of the most aggressive in a recent wave of state-level pay equity laws. This provision will require employers to revise job applications that request prior compensation information. At a minimum, such applications will have to note that providing such information is voluntary.

When it takes effect, the new law also will make it unlawful for employers to prohibit employees from discussing or disclosing their own or other employees' wages.

New Self-Evaluation Defense

The new law creates an affirmative defense to wage discrimination claims for an employer that has (1) completed a self-evaluation of its pay practices that is "reasonable in detail and scope in light of the size of the employer" within the three years prior to commencement of the action; and (2) made "reasonable progress" toward eliminating pay differentials uncovered by the evaluation.

The new law contains no information on what is required to establish that an audit is "reasonable" or what constitutes "reasonable progress" in remediating any disparities revealed by such audits. These standards are likely to be addressed in the courts after the effective date of the new law and may also be the subject of guidance from the Attorney General.

Evidence of an employer's self-evaluation or remedial steps undertaken in accordance with the new law is not admissible as evidence of any violation of Massachusetts law in some circumstances.

While the new self-evaluation defense may have advantages, it also creates risks. Any evaluation used to substantiate a defense under state law might be used against a company in litigation under federal law, which provides no similar defense. Thus, we recommend employers seeking to take advantage of this defense under state law work closely with legal counsel in conducting any audit.

Damages

As with the existing law, employers who violate the new law will be liable for unpaid wages, an equal amount as liquidated damages, and attorneys' fees. However, employers will be liable for damages over a longer period of time, as the new law extends the statute of limitations from the existing one-year period to three years after the date of the alleged violation. A pay violation occurs each time an employee is paid.

Next Steps for Employers

Employers should begin now to prepare for enforcement of the new law in 2018 by:

  • Consulting with legal counsel, such as Seyfarth Shaw's Pay Equity Group, about whether to conduct a pay equity audit;
  • Revising their employment applications;
  • Revising any policies that prohibit discussions of wages; and
  • Training hiring managers, human resources professionals, and any managers that make decisions about compensation to ensure compliance with the new law.

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
 
In association with
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.