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.

Massachusetts AG Issues Long-Awaited Final Earned Sick Time Regulations

Last November, Massachusetts voters approved Ballot Question Four, which amends the Massachusetts Wage Act and creates new mandatory sick time for Massachusetts employees beginning July 1, 2015. Under the new law, private employers must allow their Massachusetts employees to earn and use up to 40 hours of sick time per calendar year. Whether the sick leave is paid or unpaid depends on the size of the employer. Employers with 11 or more employees must provide paid sick leave, while employers with ten or fewer employees must provide unpaid sick leave.

Final Earned Sick Time Regulations

On June 19, 2015, the Massachusetts Attorney General issued the long-awaited Final Earned Sick Time Regulations, 940 CMR 33.00 et seq., which can be accessed here.

The Final Regulations contain a number of revisions and clarifications of earlier proposed versions, including:

  • Employers may require employees to use earned paid sick time to receive pay when taking other authorized leave that would otherwise be unpaid, such as FMLA leave or Massachusetts Parental Leave.
  • Employees can use earned sick time for travel to and from an appointment, a pharmacy, or other location related to the purpose for which the time was taken.
  • Further clarification on breaks in service relative to the use of accrued sick time and vesting periods.
  • The circumstances under which an employer can require documentation in support of an employee’s use of earned sick time have been expanded. For example, an employer can require documentation if an employee takes earned sick time within 2 weeks of the employee’s last day of employment.
  • Employees must submit requested documentation related to the use of earned sick time within 7 days after the earned sick time is taken, unless they demonstrate good cause for not doing so. (The earlier proposed regulations had a 30-day timeframe for producing documentation.)
  • If an employee fails to provide the required documentation related to the use of earned sick time without reasonable justification, the employer may recoup the earned sick time paid to the employee from future pay, as an overpayment. However, employers must put employees on notice of this practice.

Safe Harbor for Employees with Existing Paid Time Off Policies

The Attorney General has created a “Safe Harbor” for qualifying employers to help them comply with the new law. Under the Safe Harbor provision, employers with a paid time-off or sick leave policy that has been in existence since at least May 1, 2015 do not have to implement a new sick time policy, provided the existing policy provides for sick time comparable to that required under the new law. Employers that qualify under the Safe Harbor have until January 1, 2016 to bring their PTO/sick time policies into full compliance with the earned sick time law. In addition to the Final Regulations, information about the Safe Harbor can be found here.

Notice Obligations

On or before July 1, employers are required to post the Attorney General’s notice regarding Earned Sick Time in a conspicuous place accessible to employees in every location where eligible employees work. The required notice can be accessed here. Employers are also required to provide a hard copy or electronic copy of this notice to all eligible employees or include the employer’s earned sick time policy in any employee handbook.

Next Steps

  1. No later than July 1, 2015, employers should determine whether they can rely on the Safe Harbor through December 31, 2015, or whether they need to update their paid time off policies. Employers that qualify for the Safe Harbor need to ensure that their paid time off policies are fully compliant with the Earned Sick Time Law by January 1, 2016.
  1. No later than July 1, 2015, employers should post the AG’s workplace notice and either distribute copies of the notice or include their relevant paid time off policies in their employee handbook.
  1. Employers need to ensure that their revised paid time off policies are consistent with their related policies including, but not limited to, attendance, tardiness, and call-in procedures.

The attorneys at Beck Reed Riden are available to assist businesses in complying with the new Earned Sick Time Law.

Authored by Shannon Lynch.

Massachusetts Attorney General Issues Advisory On New Domestic Violence Leave Law

On August 8, 2014, Massachusetts Governor Deval Patrick signed into law a statute requiring employers with 50 or more employees to allow employees to take up to 15 days of leave within a 12-month period when an employee or an employee’s family member is the victim of domestic abuse. (We described the new law in our earlier post New Massachusetts Law Mandates Employee Leave For Victims Of Domestic Abuse.) The Massachusetts Office of the Attorney General recently issued advisory materials to aid Massachusetts businesses in complying with the new law (the “Advisory”). Among other things, the Advisory clarifies two issues – the definition of employee and the employer’s notice requirement under the new law.

While the domestic violence leave law applies to businesses “who employ 50 or more employees,” the Advisory clarifies that only employees working in Massachusetts count towards the 50-employee threshold. Therefore, in determining whether an employer is subject to the new law, a company should count the total number of employees (including full-time, part-time, and seasonal) it has working in Massachusetts; employees working in other states don’t need to be counted.

The Advisory also makes clear that while an employer must notify its employees of their rights and responsibilities under the law, there is no specified manner for such notice. The Advisory suggests proper notice may include an employee handbook policy; a memorandum to employees; a letter or email to employees; or a physical posting of the notice or policy in a conspicuous place. Since an employer may decide whether the leave will be paid or unpaid and whether an employee must first exhaust other paid time-off before becoming eligible for the domestic violence leave, employers should address these issues in any policy or notification.

The end of the calendar year is the perfect time for businesses to think about updating their employee handbooks and policies, particularly given the recent developments in Massachusetts leave laws. The attorneys at Beck Reed Riden are available to assist businesses with updating their relevant policies to ensure compliance with federal and Massachusetts law in the new year.

Massachusetts SJC Strikes Down Employer’s Wage Deduction Policy

A recent decision by the Massachusetts Supreme Judicial Court holds that an employer may not deduct money from an employee’s paycheck to compensate it for damage the employee has done to its property without running afoul of the Massachusetts Wage Act, G.L. c. 149, § 148.

In Camara v. Attorney General (SJC-10693) (January 25, 2011) (slip opinion here), the Court was faced with the following facts: ABC Disposal Services, Inc. (ABC) provides waste collection and recycling services in the New Bedford, Massachusetts area. Its employees have occasionally caused damage to company trucks and to the personal property of others while driving their routes. In an effort to promote safety and to reduce the number of accidents caused by its employees, ABC established a policy by which employees who were determined to be at fault for causing damage were given the option of either accepting disciplinary action or agreeing to set off the cost of the damage against their wages. Under the policy, determination of an employee’s fault was made exclusively by the company and was not subject to appeal. For those employees who agreed to a setoff, the average amount was between $15 and $30 per paycheck.

Apparently, one or more employees weren’t too happy about the setoff policy because in early 2006 the Attorney General’s office showed up and conducted an audit of payroll deductions for the previous two years. The audit revealed that under its setoff policy, ABC had deducted more than $21,000 from the wages of 27 different employees during the two-year period. Finding that the setoff policy violated the Wage Act, the Attorney General issued a civil citation against ABC, requiring it to make restitution to the employees and pay a civil penalty of almost $9,500. ABC appealed the Attorney General’s finding to the Superior Court, where the judge ruled in ABC’s favor and invalidated the citation.

The SJC reversed the Superior Court. In ruling against ABC, the Court reiterated that the Wage Act – the purpose of which is to protect employees and their right to wages – requires prompt and full payment of wages due an employee. To advance its underlying purpose, the Act prohibits “special contracts” between an employer and an employee by which the employee agrees to accept less than the full amount of wages due. The Court agreed with the Attorney General’s position that under the Act, “regardless of an employee’s agreement, there can be no deduction of wages unless the employer can demonstrate, in relation to that employee, the existence of a valid attachment, assignment, or setoff ….” The Court found that ABC’s setoff policy constituted the type of “special contract” generally prohibited under the Act.

The Court then turned to the question of whether the wage deductions ABC took constituted a valid setoff . The Attorney General argued that valid setoffs “implicitly involve some form of due process through the court system, or occur at an employee’s direction and in the employee’s interests.” In finding that ABC’s deductions were not a valid setoff, the Court held that ABC failed to establish that any of the employees in question were legally liable for damages, or that ABC was legally required to make payments to third parties on behalf of the employees. The Court found that even though the employees agreed to the wage deductions, they did not owe ABC a “clear and established debt,” which is a prerequisite for a valid setoff. The Court was particularly troubled by the fact that ABC was the “sole arbiter” of whether an employee was liable for damage caused to a company truck or to a third party’s property. The Court held that such unilateral decisionmaking, without any appellate process, did not establish that the employees owed ABC a clear and established debt. Consequently, the Court struck down the setoff policy.

The Camara decision is another example of the wage and hour minefield that employers must navigate on a daily basis. Before implementing a policy or procedure that affects employee pay, employers are encouraged to consult with experienced employment counsel.