The new guidance provides more clarity regarding which employers and employees are covered by MEPA, how multistate employers should evaluate comparable work, and how to conduct a self-evaluation of pay practices.
On March 1, 2018, the Massachusetts Attorney General’s Office issued its first guidance on the amended Massachusetts Equal Pay Act (MEPA), which takes effect July 1, 2018, and mandates equal pay for comparable work regardless of gender. While the Attorney General’s guidance is not law, it provides valuable advice for employers about how the office will interpret and enforce MEPA. In particular, the new guidance provides more clarity regarding which employers and employees are covered by MEPA (note: It’s almost everyone), how multistate employers should evaluate comparable work, and how to conduct a self-evaluation of pay practices.
Recap: Amendments to MEPA
On August 1, 2016, Governor Charlie Baker signed into law An Act to Establish Pay Equity, which amends and significantly expands the wage discrimination protections under MEPA. Some of the key provisions of MEPA that take effect on July 1 and constitute significant changes to MEPA’s current language are:
- “Comparable work”: Employers must provide equal pay to employees of different genders for “comparable work,” unless a permissible variation exists. “Comparable work” is defined as work that requires substantially similar skill, effort and responsibility, and is performed under similar working conditions. Notably, “comparable work” is not tied to job title: Employees with different job titles may be deemed to perform “comparable work” under MEPA. Employers may, however, consider the following factors only in setting wages: experience, education, seniority, production, travel requirements and merit.
- Salary history: Employers can no longer ask for an applicant’s salary history before making an offer of employment. Likewise, pay disparities based on employees’ salary histories provide no defense to MEPA violations, even where the employer legally obtained the employee’s salary history before the law changed or where the applicant voluntarily provides the information.
- Private action: An employee affected by a MEPA violation or retaliation can bring a private action in court against an employer within three years. A violation occurs each time wages are paid, meaning the three-year time period to bring an action can start over every pay period for an ongoing violation.
- Increased employer exposure for violations: Employers will owe employees affected by a violation twice the amount of the unpaid wages, plus reasonable attorneys’ fees and costs. For a retaliation claim, employers may also be required to pay any damages the employee or applicant actually incurs.
- Self-evaluation defense: Any employer that conducts a good faith, reasonable self-evaluation of its pay practices within three years before a MEPA claim will have a complete defense. MEPA does not require employers to conduct self-evaluations, however.
The Attorney General’s New Guidance
The Attorney General’s Office’s newly issued guidance is not a legal regulation, but it does address some frequently asked questions the Office has received about the scope of MEPA’s coverage. The guidance also sets forth general recommendations about conducting a self-evaluation, an important issue for employers because self-evaluations can provide a complete defense to a MEPA claim. Some key questions addressed by the guidance include:
- Who does MEPA cover? According to the Attorney General, nearly all employers in Massachusetts, including state and municipal employers, irrespective of size. For employees, MEPA covers the vast majority of employees with a primary place of work in Massachusetts, including full-time, part-time, seasonal, per-diem and temporary employees with few exceptions. Employees who telecommute to a primary place of work in Massachusetts are also covered.
- What about multistate employers? Multistate employers should ensure that employees in the same geographic location within Massachusetts are paid equally for comparable work. (Note: Neither MEPA nor the guidance otherwise defines “geographic location.”) Employers do not need to compare employees in Massachusetts to out-of-state employees unless it would be unreasonable not to do so, for example, if the only employees performing comparable work are out-of-state.
- When is it lawful to pay employees differently for comparable work? The Attorney General advises that a permissible variation must derive from a predetermined plan, policy or practice, uniformly applied in good faith. The guidance uses a written performance rating policy as an example. Although not required by MEPA, based on this guidance, employers should consider putting compensation plans, policies or practices in writing and updating them regularly so that permissible variations in pay are well-documented.
- Can employers seek an applicant’s salary history indirectly? The guidance is clear that an employer cannot “seek” an applicant’s salary history under MEPA either on their own or through third parties, such as recruiters. MEPA does not prevent employers from learning about an applicant’s salary history through public sources—but doing so is no defense to a claim of wage disparity.
- How should employers conduct a good-faith self-evaluation? A good-faith self-evaluation must be a “genuine attempt” by the employer to “identify any unlawful pay disparities” to be used as a MEPA defense. At a minimum, the self-evaluation must have included the employees or jobs at issue. Importantly, the Attorney General notes that employers who conduct a self-evaluation but take no action to remedy any discovered violations risk having the self-evaluation used as evidence against them in court.
The guidance also contains a general step-by-step guide for employers seeking to conduct a self-evaluation, and checklist for MEPA-compliant wage policies and practices. Notwithstanding the guidance, employers should consult counsel before conducting a self-evaluation. Nonprivileged reports generated in connection with a self-evaluation would likely be discoverable in employment litigation and government investigations, including federal discrimination claims, investigations by the Equal Employment Opportunity Commission and the Office of Federal Contract Compliance Programs.