Employment Law
E-ALERT
August 2016
Massachusetts Enacts "An Act to Establish Pay Equity"
On August 1, 2016, Massachusetts Governor Charlie Baker signed into law a bill amending the Commonwealth’s Equal Pay Act. The purpose of the new law is to ensure that all workers in Massachusetts are paid equally for comparable work performed and to provide the opportunity to earn competitive salaries in the workplace. This new law imposes strict equal pay obligations on employers and limits certain information employers can request regarding the salary history of job applicants. Below is a summary of the new law and recommended steps for employers.
SUMMARY OF MASSACHUSETTS EQUAL PAY ACT
The law requires employers to pay men and women equally when their work is “comparable,” (i.e., when the work is “substantially similar” in skill, effort, responsibility, and working conditions). Employers must post about an employee’s rights under the law.
Wage variations are allowed if based on:
- Seniority;
- A bona fide merit system;
- A bona fide system which measures earnings by quantity or quality of production or sales;
- Geographic location;
- Education, training, or experience to the extent such factors are reasonably related to the job in question and consistent with business necessity; and/or
- Travel.
An employer is also prohibited from:
- Banning employees from discussing their compensation;
- Requesting that an applicant disclose prior wages or salary history;
- Seeking a prospective employee’s salary history from a former employer, except after presenting a formal offer and with the written consent of the prospective employee; and/or
- Retaliating against an employee.
WHAT SHOULD I DO NOW?
The law does not go into effect until July 1, 2018. However, employers should review their job applications and hiring forms now and eliminate mandatory wage or salary history disclosure. Policies should also be revised to eliminate any ban on employee discussion of compensation and benefits. Most importantly, employers should proceed to conduct a self-evaluation of their pay practices.
CONTACT
Please contact a member of our Employment Law Practice to discuss the impact of this new law on your company’s policies and practices.
This article is provided as a courtesy and may not be relied upon as legal advice, or to avoid taxes and penalties. Distribution to promote, market, or recommend any arrangement or investment to avoid or evade taxes, including penalties, is expressly forbidden. Any communication with the author as to its contents, does not, of itself, create a lawyer-client relationship. Under the ethical rules applicable to lawyers in some jurisdictions, this may be considered advertising.
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