Back in 1945, Massachusetts became the first state in the country to pass an equal pay law. But despite its efforts, the gender pay gap unfortunately persisted. According to Mass.gov, women working full time in Massachusetts earn, on average, about 84.3% of what men earn, and the gap is even larger for women of color. In the hopes of combating this issue, Massachusetts is updating its pay equity law with new provisions, which will go into effect on July 1.
With these revisions, Massachusetts joins other states and municipalities in trying to narrow the pay gap by requiring equal pay for the same or similar work.
Known as the Massachusetts Equal Pay Act (MEPA), the update is intended to provide clarity on what constitutes unlawful wage discrimination, and include added protections designed to ensure greater fairness and equity in the workplace. Before the law officially goes into effect, it is important for businesses and HR departments to understand what the amendment entails and what happens if they violate it.
The updated law requires employers to pay employees the same wage for comparable work. This may sound simple, but it’s important to understand the nuances. The updated law states that employers may not discriminate on the basis of gender in the payment of wages or pay any person a salary or wage rate less than the rates paid to employees “of a different gender for comparable work.” To understand what this means, we first need to clarify the meanings of “wages” and “comparable work.”
Wages refer to all forms of remuneration for work performance – including commissions, bonuses, profit sharing and vacation time, while comparable work refers to all work that requires substantially similar skill, effort and responsibility, and is performed under similar working conditions (without reference to “character” or “characteristics” of a job).
The new law provides clear qualifications around the pieces of information from which employers can use to base a salary offer. These include:
- Seniority (time spent on protected maternity leave cannot reduce seniority)
- Quantity and quality of production, sales or revenue
- Geographic location or requirement of travel
- Education, training or experience “to the extent such factors are reasonably related to the particular job in question”
Salary history limited
The goal of the new law is to address the gender pay gap by implementing a framework that dismantles the practices that have historically perpetuated the gap. Employers are no longer allowed to inquire about a prospective employee’s wage or salary history before an employment offer is made. Employers are, however, permitted to request a prospective employee’s salary expectation as long as the employer does not prompt the candidate for information relating to current compensation or ask improper follow-up questions.
Furthermore, employers cannot prohibit employees from disclosing or discussing their wages, benefits or other compensation with one another, and any employee that chooses to exercises those rights is protected from retaliation.
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Pay equity reviews
In order to help companies stay compliant, they can perform a self-evaluation by undergoing a “Pay Equity Review,” which requires data gathering and analysis of both job and employee information. Performing a self-evaluation will offer a degree of protection to any company that’s found in violation of the law. To receive that protection, a company must have completed an evaluation of “reasonable scope and detail” within the past three years and prove that progress has been made towards eliminating wage differentials.
More information and templates can be found on the Massachusetts Attorney General’s website.
Violations are costly
Penalties under the amendment are costlier than ever, which is why it’s so important to fully understand the law. If an employer is found in violation, employees are entitled to two times the wages they weren’t paid, for every paycheck from the previous three years. Additionally, they are able to pursue a private right of action on their own behalf, or on behalf of any employees that are similarly situated.
MEPA isn’t something that Massacusetts employers should take lightly, and ensuring compliance should be a top priority. Make sure your HR departments and executives understand the rules of the new law and be sure to consult with an attorney or recruiting firm if there is any uncertainty about current hiring or employment practices.