Massachusetts Governor Signs New Pay Equity Bill Into Law

On August 1, 2016, Massachusetts Governor Charlie Baker signed into law a bill replacing the state’s existing Equal Pay Act (M.G.L. c. 149, § 105A), which was first enacted in 1945. The new Act clarifies the concept of “comparable work” and expressly prohibits employer conduct that – intentionally or unintentionally – has historically contributed to the wage gap between male and female employees.

The new Act prohibits all employers from discriminating “on the basis of gender in the payment of wages, including benefits or other compensation, or pay[ing] a person a salary or wage rate less than the rates paid to employees of a different gender for comparable work.” The new Act clarifies the concept of “comparable work” by defining it as “work that is substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions.” An employee’s job title or job description, by itself, will not determine comparability. Variations in compensation and benefits are not prohibited if based upon a bona fide seniority or merit system; a system under which earnings are measured by quantity or quality of production or sales; geographic location; education, training, or experience, provided such factors are reasonably related to the job and consistent with business necessity; or travel, if the travel is a regular and necessary condition of the particular job.

The new Act also expressly prohibits employers from engaging in the following:

  • Forbidding employees from inquiring about, discussing, or disclosing information about either their own compensation and benefits or those of other employees (already prohibited under the National Labor Relations Act);
  • Screening applicants based on their compensation and benefits or salary histories, including by requiring that an applicant’s prior compensation and benefits or salary history meet minimum or maximum criteria;
  • Requesting or requiring an applicant to disclose prior wages or salary history;
  • Seeking an applicant’s salary history from a current or former employer before making a job offer and without the applicant’s written authorization; and
  • Retaliating against an employee for opposing any act prohibited under the new law or participating in any action to enforce rights under the law.

The new Act also broadens the remedies available to aggrieved employees. It increases the statute of limitations from one year to three and creates a continuing violation provision under which a new limitations period will be triggered each time an employee is paid in violation of the law (similar to the federal Lilly Ledbetter Fair Pay Act of 2009). Employees may file an action directly in court, without having to first file with the Massachusetts Commission Against Discrimination or the Attorney General’s Office. Employers found to be in violation of the new law are automatically liable for double damages and reasonable attorneys’ fees. The Attorney General may also bring an action on behalf of one or more aggrieved employees.

Finally, the new Act creates an affirmative defense for an employer who, within three years of the commencement of an action, has completed a good faith self-evaluation of its pay practices and can demonstrate that reasonable progress has been made towards eliminating gender-based pay differentials in accordance with such evaluation. An employer may design its own self-evaluation as long as it is reasonable in detail and scope in light of the employer’s size. Employers may also utilize templates and forms to be issued by the Attorney General’s Office.

The new Act does not become effective until July 1, 2018. This gives employers plenty of time to review their current pay practices and make any changes necessary to comply with the new statutory requirements. Beck Reed Riden’s experienced employment lawyers are available to assist employers with this task.