United States: The Massachusetts Equal Pay Act: One Year Later

The amendments to the Massachusetts Equal Pay Act ("MEPA") have been in effect for more than one year, since July 1, 2018. Many employers have already adapted to some of the changes brought about by the amendments, including the salary history ban (prohibiting employers from asking about prior compensation) and wage transparency provision (prohibiting employers from banning employee discussions about pay).

Employers that have been hoping for guidance from the courts about the more subjective requirements of the law, including how to determine which employees are "comparable," have not received it. So far, there has been minimal litigation under MEPA. Cases have been filed against two high-profile Boston institutions, the Boston Symphony Orchestra and Boston Public Schools. But the first settled confidentially, and there has been no notable progress on the public docket of the latter.

"Under those circumstances, one of the most effective things that employers can do to insulate against pay equity liability remains to conduct a pay audit."

For employers that have considered conducting an audit but have not yet had the budget or other resources to do so, this article addresses whether to prioritize this task and what data issues to consider.

Should Employers Conduct A Pay Audit?

Conducting a proactive pay equity analysis is often the first and best step employers can take to ensure fair pay and diminish legal risk. Taking this step, however, should be approached with forethought and caution. Employers should make an informed decision about whether and when to conduct an audit.

A proactive pay equity audit is a valuable exercise when performed properly. It allows employers to identify and reduce risks, and can be aligned with organizational efforts to ensure equal pay in their workforces.

It can also be used to substantiate an affirmative defense under some state-level pay equity laws. For example, MEPA 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 a law suit; and (2) made "reasonable progress" toward eliminating pay differentials uncovered by the evaluation. The Attorney General's guidance describes "reasonable progress" as taking "meaningful steps" in a "reasonable amount of time" that will be evaluated based on "how much time has passed, the nature and degree of its progress as compared to the scope of the disparities identified, and the size and resources of the employer." To be eligible for the affirmative defense, employers do not have to pay employees retroactively for historic disparities.

However, there are some key risks to be considered. If not adequately protected, an audit might be used against an employer in litigation under the federal Equal Pay Act or Title VII, which do not provide a similar affirmative defense. Thus, employers should work with counsel in order to protect the assessment process and results with the attorney-client privilege. Without these protections, a self-evaluation (and any wage differentials identified by it) may be discoverable in the event of a lawsuit. Employers should protect the audit at the outset and make an informed decision as to whether to waive the privilege in subsequent litigation. Counsel with experience and expertise in pay equity matters can also play a valuable role in shaping the scope and procedure for an audit to maximize its utility in identifying disparities that may become legal disputes and to ensure that the work product generated by the audit will make for effective evidence, if it is ever needed for use in court.

What Is The Typical Audit Process?

The key steps in a typical audit are: 1) selecting the internal and external team, including attorneys and labor economists; 2) collecting the data needed; 3) conducting the initial analysis; 4) collecting additional data and revising the analysis to address unexplained differentials; and 5) considering remediation and revisions to policies and/or practices. After an employer gathers the initial data and a labor economist performs the initial statistical analysis, the team typically identifies employees whose pay is not explained by the factors considered in the initial model, e.g., their pay appears too low or too high. The team may then review personnel records and other data about the flagged employees in order to determine whether there is a non-gender based explanation for the differential that has not been incorporated into the model. This iterative process may continue until the employer fully explains the apparent wage differential or concludes there is a problem area and determines whether and how to remediate it.

Do You Track the Data You Need For A Pay Audit?

Employers will, of course, need pay and demographic data to conduct an audit. This is typically readily available in HR information and payroll systems.

Other data points that may help to explain differences in pay under the applicable federal and state equal pay laws are often not fully captured in employers' information systems. This includes details about employees' education, certifications and training, and prior relevant experience.

For example, MEPA requires the employers provide equal pay to employees of different genders who perform jobs that require substantially similar skill, effort and responsibility. Employers sometimes do not have readily accessible data needed to fully determine which jobs should be compared because of the "skill, effort and responsibility" involved. For example, "responsibility" may be measured by data not typically tracked in electronic information systems, such as amount of budget managed, the authority to execute legal documents, or the number of direct reports.

Employers also may not have compiled data needed to fully determine, within each comparable group, whether one employee may be paid more than another due to relevant experience. Electronic information systems often do not track pre-company relevant experience or level of educational degree. Depending on the number of employees, obtaining that data from resumes may not be feasible. While it is essential to consider these data gaps, a proactive pay equity analysis can still be extremely beneficial to identify employees whose pay should be further evaluated.

Even employers without perfect data -- and this is almost all employers -- can still benefit from a proactive pay assessment.

Conclusion

Employers that have not yet conducted a MEPA audit should consider working with employment counsel to do so, beginning with identifying any gaps in their data that may delay the process. While employers who end up in litigation may decide not to assert the affirmative defense due to the risks identified above, employers who conduct privileged audits are in the best position to make that determination if faced with litigation.

Previously published in the Greater Boston Chamber of Commerce.

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
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please 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