A new Massachusetts pay equity law going into effect on July 1, 2018, contains provisions that are much broader than current federal law and even prohibits employers from screening applicants based on their salary or wage history.
Although the law doesn’t take effect for nearly two years, employers are advised to start planning immediately in order to be in compliance on time.
The measure, signed into law by Governor Charlie Baker on August 1, is aimed at strengthening pay equity for women. An alert from Skoler, Abbott & Presser, P.C., which has an office in Springfield, Massachusetts, explains that under the new law, pay differences between employees performing comparable work are acceptable only if based on:
- A seniority system;
- A merit system;
- A per-unit or sales compensation scheme;
- The geographic location of the job; or
- The amount of travel required.
The Skoler, Abbott & Presser alert also explains that the law defines “comparable work” as work that requires “substantially similar skill, effort and responsibility” and is performed under “similar working conditions.” That language is broader than the “equal pay” language used under federal law.
In addition to penalizing employers that require applicants to provide wage and salary history in order to be considered for a position, the new law won’t allow employers to prohibit employees from talking about their salaries.
The law prohibits employers from reducing the salary of an employee in order to come into compliance, the Skoler, Abbott & Presser alert explains. Instead, employers with unexcused pay differentials will need to bring the pay of lower earners up to the pay of the highest earner doing “comparable work.”
Employers can take advantage of language in the law providing an affirmative defense to businesses that complete a “good-faith” self-evaluation of their pay practices and show “reasonable progress” in eliminating wage differentials.
“This means that employers [that] adequately audit their pay practices may avoid liability under the new law, but only if [their] self-evaluation is ‘reasonable in detail and scope in light of [their] size,’” the Skoler, Abbott & Presser alert says. “We recommend that employers consider formally auditing their pay practices to ensure compliance with the new law.”