The state’s new pay equity law, which amends the Massachusetts Equal Pay Act (“MEPA”), will take effect on July 1, 2018. It is one of the strongest pay equity laws in the country, and subjects employers to double damages and attorneys’ fees in the event of a violation. Moreover, it is a “strict liability” statute. Thus, whether or not an employer intends to discriminate against employees of one gender is “irrelevant” to the analysis.
The amendments prohibit employers from, among other things:
• Paying different wages to people of different genders who perform “comparable work,” unless the difference in salary is attributable to one (or more) of six enumerated statutory factors;
• Asking job applicants about their wage or salary history;
• Decreasing the wages of an employee solely to close the wage gap;
• Retaliating against employees for exercising their rights under MEPA.
The revisions also establish a safe harbor provision for employers who perform self-evaluations of their pay practices.
What Does “Comparable Work” Mean?
MEPA defines “comparable work” as work that “requires substantially similar skill, effort, and responsibility” that is performed under similar working conditions. Employers should not assume that a job title, or even a job description, necessarily determines comparability. In fact, employees need not even be in the same business unit or department in order have “comparable” jobs. Notably, this is a broader definition than the “equal work” standard under federal law.
Even if employees are in comparable roles, however, employers are permitted to pay them different salaries if the difference is based on of one (or more) of the following factors:
• A seniority system (as long as seniority is not affected by pregnancy, parental or family leave);
• A merit system;
• A system that measures earnings by quantity or quality of production, sales, or revenue;
• The geographic location in which a job is performed;
• Education, training, or experience, as long as these factors are reasonably related to the job in question; and
• Travel that is a regular and necessary part of the job.
What Employers Should Know About the Safe Harbor Provision
In order to trigger the safe harbor provision, which establishes an affirmative defense against liability for claims of pay discrimination, an employer must have conducted a “reasonable and good faith” pay audit within the previous three years (and before an employee files an action), and must demonstrate that it is making “reasonable progress” towards eliminating wage differentials across genders.
Self-evaluations not only help employers identify and rectify wage gaps, they guard against liquidated damages in the event of a judgment against the employer, even if the evaluation was not “reasonable” in detail and scope.
Guidance for Employers
The Massachusetts Attorney General’s Office has issued a Guidance that addresses the amendments. While the Guidance does not have legal force, it is a useful compliance tool and a good place to start if you have basic questions about how to ensure you are compensating your employees equally across genders for “comparable work.” However, employers should bear in mind that “the complexity of the analysis required will vary significantly depending on the size, make-up, and resources of each employer”; the Guidance does not, and cannot, address the many fact-specific situations that may arise at any given place of employment.
In addition to the Guidance, the AG’s Office has generated a “Pay Calculation Tool” to help employers identify and evaluate gender-based pay gaps. Smaller employers with clearly defined groupings of comparable jobs and relatively simply pay structures may benefit from using the tool, at least as a first step; it is not appropriate for large pay groups or complicated pay structures. Furthermore, the data the tool generates may be discoverable in litigation or government investigations, so employers should consult with counsel before conducting any self-evaluation.