Executive Summary: On July 23, Massachusetts lawmakers unanimously approved An Act to Establish Pay Equity (the "Bill"), which seeks to ensure that men and women are paid equally for comparable work. Variations in pay must be based on legitimate reasons, as enumerated in the Bill. If Governor Baker signs the Bill into law, which he is expected to do, it will be effective in 2018, on either January or July 1.
Good Faith Defense Available: The Bill provides for an affirmative defense for employers who have both completed a good faith self-evaluation of their pay practices and can demonstrate that reasonable progress has been made towards eliminating compensation differentials based on gender for comparable work in accordance with that evaluation. The self-evaluation may be of the employer's own design and will not be admissible in any proceeding as evidence of a violation that occurred prior to the date the self-evaluation was completed or within six months thereafter.
Best Practices Self-Evaluation: We will be working with clients on how to develop a "best practices" self-evaluation, which is new and uncharted waters for Massachusetts employers. Employers must carefully consider the best way to effectively design and implement a self-evaluation. As there is substantial time for this to occur, we do not recommend that employers rush to do the self-evaluation, but instead to take the time first to develop a "plan of action" regarding how best to evaluate current pay structures generally and how those structures are applied to employees. Then the employer can determine what is the best form and scope of a self-evaluation. We also recommend that this be done with legal counsel, not only to obtain appropriate legal advice and counsel, but also to be able to do so in a manner that is subject to the attorney-client privilege.