On August 1, 2016, Massachusetts Governor Charlie Baker, signed “an act to establish pay equity.” The law passed unanimously in the House and Senate to remedy the gender wage gap. It clarifies the previously ambiguous definition of comparable work. The definition now includes consideration of similar skill, effort, responsibility, and working conditions. In effect, this clarification holds employers to higher standards to provide equal pay.
Effective July 2018, the law also places unique limitations on Massachusetts employers by banning the screening of applicants based on wage or salary history. Specifically, it states that requiring an applicant to disclose prior wages, benefits, or salary history as a condition of moving forward in the application process is unlawful. In light of these limitations, employers with locations in Massachusetts should be aware of how their application and hiring efforts are conducted. It may become necessary for recruiters to undergo training so as not to violate these parameters.
Additionally, this law eliminates “pay secrecy” rules. This requirement is very similar to OFCCP’s pay secrecy rule and other state laws on pay secrecy that have been passed. However, employers or employees are not required to answer questions about their compensation.
Finally, this law creates an affirmative defense for employers to encourage proactive analyses and compliance. Employers who conduct an appropriate “self-evaluation” of their compensation and use that analysis to “demonstrate reasonable progress” in reducing pay disparities may invoke this affirmative defense. While the law does not define the parameters for what a self-evaluation would look like, employers are permitted to design their own, as long as it is “reasonable in detail and scope.”
Many other states are currently following this trend of instituting tougher pay equity laws. It is incumbent upon employers to demonstrate their willingness to engage in “good faith efforts” to uphold the law. Going forward, employers should be mindful to involve legal counsel and compensation analysts in their review of their recruitment, hiring, and pay systems.
For more information on the Massachusetts Pay Equity Bill, the full text of the law can be found here.
By Macy Cheeks, HR Analyst, and Rachel Monroe, HR Analyst, at DCI Consulting Group