What Employers Need to Know If “An Act to Establish Pay Equity” Becomes Law

On January 28, 2016, the Massachusetts Senate unanimously passed S. 2107: “An Act to Establish Pay Equity” (the “Act”), which would lower the threshold for employees to litigate gender-pay inequality claims. The Act, which would replace G. L. c. 149, § 105A in its entirety, would allow employees to discuss wages with one another and prohibit employers from retaliating against employees who do so. Although the Act must still pass through the House and receive the blessing of Governor Baker before becoming law, employers should nonetheless examine the Act and be prepared to take any steps necessary to ensure that their wage-payment policies are in compliance.

What is the Current Law in Massachusetts Concerning Gender Pay Equality?

In Massachusetts, employers may not discriminate in the payment of wages on the basis of gender, or pay any worker less than the rates paid to employees of the opposite sex for work of “like or comparable character.” What constitutes “like or comparable character” is a matter left up to the courts. Employers found liable for violating the law must pay aggrieved employees double the amount of unpaid wages as well as attorneys’ fees and costs. Employers may not rely upon a wage agreement with the employee as a defense, though variations in rates of pay are not prohibited when based on seniority. Employees looking to file suit must move quickly; they only have 1 year after the date of the “alleged violation,” a term not explicitly defined.

How Would the Act Change Mass. Law on Gender Pay Equality?

The Act provides greater flexibility for employees to pursue equal pay for equal work while also providing clarity on existing Massachusetts law. To begin with, employees would be permitted to discuss their and others’ wages (and employers would be prohibited from requiring that employees not do so). Employers would also be prohibited from screening job applicants based on their salary history. To strengthen these rights, the Act prohibits employers from taking adverse employment actions against employees who raise the issue of gender pay inequality or who disclose/discuss employee wages.

In addition, employees would now be allowed 3 years to bring suit from the date of the alleged violation. Aggrieved employees need not first file a charge of discrimination with the Massachusetts Commission Against Discrimination (“MCAD”).

The Act also attempts to clarify existing law. For example, the Act defines “comparable work” as “work that is substantially similar in content and requires substantially similar skill, effort and responsibility and is performed under similar working conditions; provided, however, that a job title or job description alone shall not determine comparability.” Further, the Act defines when a violation occurs: “when a discriminatory compensation decision or other practice is adopted, when an employee becomes subject to a discriminatory compensation decision or other practice or when an employee is affected by application of a discriminatory compensation decision or practice, including each time wages, benefits or other compensation are paid, resulting in whole or in part from such a decision or practice.”

Employers Who Conduct Self-Evaluations of Their Payment Policies Are Provided an Affirmative Defense

Although the Act is designed to protect employees from gender pay inequalities, the Act also provides an affirmative defense to well-meaning employers who make an effort to eliminate gender pay inequity. An employer against whom an action is brought will have an affirmative defense if the employer has completed a self-evaluation of its pay practices, in good faith and within the previous 3 years, and can demonstrate reasonable progress toward eliminating gender pay differences for comparable work. Employers should pay close attention to the Act’s nuanced self-evaluation standards. Employers who have not completed a timely self-evaluation are not entitled to this affirmative defense, but also are not subject to a negative or adverse inference for not having conducted one. Finally, wage variations due to seniority remain permitted, as are variations due to bona fide merit systems, systems based on sales output, job location, and education or training.

Employers should keep an eye on the Act and if passed, take steps to comply with the Act’s requirements, including a good faith self- evaluation of their pay practices. Please feel free to contact the author or any of the other experienced employment attorneys at Conn Kavanaugh with inquiries or questions.

ANTHONY V. BOVA

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2017-01-13T17:24:28+00:00 February 17th, 2016|Categories: Anthony Bova, Human Resources Compliance, Laws & Regulations, MCAD & EEOC, Wage & Hour|0 Comments

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