Diversity & Inclusion, HR Management & Compliance

Yes, It’s Time to Conduct (Another) Pay Equity Self-Audit

Many Massachusetts employers conducted pay equity self-audits in 2018, just before or soon after the Massachusetts Equal Pay Act (MEPA) went into effect. Although it probably seems like it was only yesterday, July 1, 2021, will mark the third anniversary of the MEPA’s implementation. If your organization conducted a self-evaluation in 2018, you need to schedule another soon so you can continue to rely on an affirmative defense built into the Act.

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Source: Feodora Chiosea / iStock / Getty Images

How the MEPA Operates

Governor Charlie Baker signed the MEPA, an amendment to the state’s Equal Pay Act, in 2016. The law’s purpose is to reduce the pay gap between men and women by providing a broader definition of “comparable work” and limiting the acceptable reasons for paying people of different genders differently. Notably, under the MEPA, pay differences between persons performing comparable work are acceptable only if they’re based on:

  • A seniority system;
  • A merit system;
  • A per-unit or sales compensation scheme;
  • The geographic location of the job;
  • Education, training, and experience; or
  • The amount of travel required.

The MEPA defines “comparable work” as tasks requiring “substantially similar skill, effort and responsibility” and performed under “similar working conditions.” The “substantially similar” language is broader than the “equal pay” language used under federal law.

Affirmative Defense for Employers

The MEPA provides a silver lining for employers. Your organization is entitled to an affirmative defense if you (1) conduct a good-faith self-evaluation of your pay practices within the three-year period before an equal pay lawsuit is filed and (2) demonstrate reasonable progress toward eliminating any wage differentials.

In other words, if you adequately audit your pay practices within the three years before a lawsuit, you can avoid liability under the new law. One caveat: The self-evaluation must be “reasonable in detail and scope in light of the size of the employer.” You must conduct the audit before any lawsuit is filed.

Get Your Attorney Involved

The attorney general’s guidance on the MEPA includes a step-by-step checklist for the self-evaluation process. It also recommends you consult with legal counsel about the self-evaluation to ensure you’re using the most appropriate analysis for your organization.

We agree. In addition to assisting with the format for the analysis, your employment attorney can provide a legal opinion about whether (1) particular jobs are comparable under MEPA and (2) your justifications for any pay disparities meet the new law’s requirements.

Moreover, involving your attorney means the self-evaluation will be protected by the attorney-client privilege, in which case you wouldn’t have to reveal the results unless you wanted to do so. Otherwise, you risk having the self-audit used as evidence against your organization if an employee files a claim.

Bottom Line

For those of you who completed a pay equity self-audit close to three years ago (or never performed one), now is the time to consider conducting another one to protect your business. With mandatory double damages, attorneys’ fees, and costs available to a prevailing employee, performing an audit now could save your business a lot of money later.

Amelia J. Holstrom is a partner at the firm of Skoler, Abbott & Presser, P.C., in Springfield, Massachusetts. Amelia can be reached at aholstrom@skoler-abbott.com.