Massachusetts: Attorney General Issues Guidance on Upcoming Statewide Equal Pay Law

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Employers with MA Employees

EFFECTIVE

July 1, 2018

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On March 1, 2018, the Massachusetts Office of the Attorney General issued guidance on the Act to Establish Pay Equity (the “Act”).  Originally signed in 2016 and soon-to-be effective on July 1, 2018, the law includes several significant new provisions designed to improve pay equity between employees of different genders. The Attorney General’s Guidance provides further clarity on how the Act applies to employers. Several key provisions are summarized below.

  1. Definition of Comparable Work. The Act requires employees who perform comparable work to be paid the same rate of compensation.  The definition of “comparable work” is broader than the federal standard, and includes work that “requires substantially similar skill, effort, and responsibility.”  Pay differentials are permitted only under a few, specified exceptions (e.g., a seniority system, a merit system, education, training, or experience, etc.).  The Guidance reviews each exception and provides further information on how they are applied.
  2. Effect on Multi-State/Out-of-State Employees. The Guidance states that the Act applies to any employee with a “primary place of work” in Massachusetts. This includes employees who work from a business with a base of operations in Massachusetts, but routinely travel out of state or who telecommute from outside of Massachusetts to a Massachusetts base.
  3. Prohibition on Salary History Inquiries. The Act prohibits employers from seeking salary history information from applicants, unless the employer is either (1) confirming salary information the applicant voluntarily shared, or (b) if an offer of employment with compensation has already been made.  The Guidance adds that employers may ask an applicant about their preferred salary expectations during the interview process; however, employers must take care that these questions are not posed or construed in a way as to solicit prior salary information. Employers are also prohibited from obtaining salary history information through public records.
  4. Employer’s Self-Evaluation Defense. Employers may establish an affirmative defense if they (1) conduct reasonable, good-faith self-evaluations of pay practices within the previous three years and before an employee files a wage equity claim, and (2) if the employer shows reasonable progress in eliminating wage differentials identified through the self-evaluation process.
    1. The Guidance provides a definition of “good faith,” and notes that a “reasonable” self-evaluation is dependent on the size and complexity of the organization’s workforce. Encouragingly, the Guidance also indicates that even if a self-evaluation is found insufficient, so long as it is meets the reasonable, good-faith standard, employers may still be spared from paying liquidated damages associated with a wage equity claim.
    2. The Guidance’s appendix includes guidelines on when an employer should conduct self-evaluations, as well as a pay calculation tool that employers can use to compare employee base salaries to the average in a group. This tool is intended for small group comparisons.

Action Items

  1. Review the Attorney General’s Guidance here.
  2. Contact Anabel Tarzian, Director of Client Services, at (888) 230-3231 or atarzian@managease.com to engage our services for compensation audits, compensation structuring, or compensation market surveys.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2018 ManagEase

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