In anticipation of 2018, Massachusetts employers should review their job applications, hiring and pay practices policies to ensure compliance with this new statute prior to its effective date.

In an effort to eliminate the pay gap between men and women, on August 1, 2016, Massachusetts enacted legislation that requires equal pay for “work that is substantially similar in that it requires substantially similar skill, effort, and responsibility and is performed under similar working conditions.” For clarification, the law states that “a job title or job description alone shall not determine comparability.” This legislation goes into effect in 2018.

Titled An Act to Establish Pay Equity (“the Act”), the law provides certain new defenses for employers who can establish that a pay differential is on account of any of the following:

  1. a bona fide system that rewards seniority with the employer; provided, however, that time spent on leave due to a pregnancy-related condition and protected parental, family and medical leave, shall not reduce seniority;
  2. a bona fide merit system;
  3. a bona fide system that measures earnings by quantity or quality of production or sales;
  4. the geographic location in which a job is performed;
  5. education, training or experience to the extent such factors are reasonably related to the particular job in question and consistent with business necessity; or
  6. travel, if the travel is a regular and necessary condition of the particular job.

The Act provides an additional defense to those employers who self-evaluate and make progress towards eliminating the gender gap. Specifically, an employer against whom an action is brought is entitled to the defense if it can demonstrate the following:

  • It has within the previous three years completed a self-evaluation of its pay practices in good faith; and
  • It can demonstrate that reasonable progress has been made towards eliminating compensation differentials based on gender for comparable work in accordance with that evaluation.

It should be noted that an employer who is paying a wage differential in violation of the Act cannot reduce the pay of any employee in order to comply with the Act.

In addition, the Act prohibits employers from 1) requiring, as a condition of employment, that an employee refrain from inquiring about, discussing or disclosing information about either the employee’s own wages, including benefits or other compensation, or any other employee’s wages; 2) screening job applicants based on their wage or salary histories; and 3) seeking the salary history of any prospective employee from any current or former employer, unless the prospective employee provides written authorization and in that case only after any offer of employment with compensation has been made to the prospective employee.

An employer who violates the Act is liable to the employee affected in the amount of the employee’s unpaid wages, including benefits or other compensation, and in an additional equal amount of liquidated damages, as well as attorneys’ fees and costs. The Attorney General may also bring an action to collect unpaid wages under the Act.

What This Means for Employers

In anticipation of 2018, Massachusetts employers should review their job applications, hiring and pay practices policies to ensure compliance with this new statute prior to its effective date. Employers also should consider, with the assistance of legal counsel, the potential risks and rewards of a self-evaluation into pay differentials.