What the Pay-equity Law Means for You

Opinion

By Brad MacDougall

The compromise pay-equity bill passed by the Massachusetts Legislature and signed into law by Gov. Charlie Baker will require changes in the way employers do business. The law takes effect July 1, 2018.

The bill bars employers from discriminating based on gender when it comes to wages and other compensation, unless the variation is based upon a mitigating factor like seniority, performance, or skills. Passage of the bill followed weeks of intensive negotiations among House leaders, Attorney General Maura Healey, and the Associated Industries of Massachusetts (AIM), which opposed previous versions of the measure that would have limited the ability of employers to attract and retain skilled employees.

Here is a summary of what employers need to know about the measure:

• The law states that “no employer shall discriminate in any way on the basis of gender in the payment of wages, or pay any person in its employ a salary or wage rate less than the rates paid to its employees of a different gender for comparable work.” Wage differentials are permitted, however, based upon a system that rewards seniority with the employer; 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 to the extent such factors are reasonably related to the particular job in question; or travel, if the travel is a regular and necessary condition of the particular job.
• The law provides a three-year affirmative defense from liability to employers who conduct a self-evaluation of their pay practices in good faith and can demonstrate that reasonable progress has been made toward eliminating wage differentials based on gender for comparable work. The self-evaluation may be of the employer’s own design, so long as it is reasonable in detail and scope in light of the size of the employer, or may be consistent with standard templates or forms issued by the attorney general.
• The law affirms the ability of employers to protect the confidential information about employee wages should another employee seek that information.
• Employers are prohibited from asking job candidates about their salary history, although, if a prospective employee has voluntarily disclosed such information, a prospective employer may confirm prior wages or salary or permit a prospective employee to confirm prior wages or salary. Also, a prospective employer may seek or confirm a prospective employee’s wage or salary history after an offer of employment with compensation has been negotiated and made to the prospective employee.

Employers who currently ask about wage history on their job applications will likely have to update those documents. Lawyers who have reviewed the law suggest that companies might create a checkoff that would allow job seekers to acknowledge their willingness to voluntarily provide wage history.

The attorney general will develop regulations for the law that will answer many of the specific questions that employers are bound to have.

AIM continues to believe that the best long-term strategy to achieve pay equity in the workplace is to ensure that both women and men possess the education and skills that allow our enterprises to succeed an in increasingly complex global economy.

Brad MacDougal is vice president of Government Affairs at AIM. This article first appeared on the AIM blog; blog.aimnet.org