On March 1, 2018, the Massachusetts Attorney General’s Office issued its formal Guidance on the amendments to the Massachusetts Equal Pay Act (MEPA) taking effect on July 1, 2018. These amendments represent a significant change in the law, and employers will want to take prompt steps to determine if their pay practices are compliant.
Overview of the Amended Massachusetts Equal Pay Act (MEPA)
The amended law will affect virtually all Massachusetts employers (including state and municipal employers). There is no exemption for firms employing fewer than a certain number of employees. The amended law taking effect on July 1, 2018, is significant in three respects.
First, the new law prohibits employers from inquiring about a prospective employee’s salary history. This is a feature of the new law that garnered national attention – including a front-page article in the New York Times – when it was enacted last summer.
Second, the new law more broadly defines what type of work is considered “comparable” for purposes of gender pay equity.
Third, the new law creates new rewards for employers who perform an internal self-evaluation of its pay equity practices on a regular basis. If the employer properly conducts such an audit, that audit can serve as an affirmative defense (that is, a complete defense to liability) against a lawsuit seeking damages under the Massachusetts Pay Equity Act.
For a detailed review of the MEPA, refer to our prior discussion.
The Massachusetts AG’s Formal Guidance
The AG’s Guidance contains a “Frequently Asked Questions” section that drills down into the finer points of the new MEPA. These points include the following:
- Prohibition on inquiries into salary history. Beginning on July 1, 2018, employers cannot ask applicants about their salary history. Inquiries about salary requirements or salary expectations are, however, permissible. But the AG’s Guidance cautions the employers should take care “that such questions are not framed or posed in a way that is intended to elicit information from the prospective employee about his or her salary or wage history.” For example, the AG discourages an employer from asking a follow-up question regarding salary expectations such as “what is that expectation or need based on?”
- The definition of “comparable work.” MEPA generally provides that: “No employer shall discriminate in any way on the basis of gender in the payment of wages, or pay any person in its employ a salary or wage rate less than the rates paid to its employees of a different gender for comparable work.” MEPA defines “comparable work” as work that requires substantially similar skill, effort, and responsibility, and is performed under similar working conditions. The Guidance attempts to further define these vague terms, but for the most part, it falls back upon generalities. “Skill” is defined to “include such factors as experience, training, education, and ability required to perform the jobs.” “Effort” is defined to “refer to the amount of physical or mental exertion needed to perform a job.” And “responsibility” is defined to “encompass the degree of discretion or accountability involved in performing the essential functions of a job, as well as the duties regularly required to be performed for the job.” The Guidance does not succeed in taking the generality out of these inherently vague terms. Therefore, we can expect that the courts ultimately will have to decide what they mean on a case-by-case basis.
- Self-evaluations. MEPA provides a complete defense to a legal claim for any employer that has conducted a good faith, reasonable self-evaluation of its pay practices within the previous three years and before an action is filed against it. To be eligible for this affirmative defense, the self-evaluation must be reasonable in detail and scope, and the employer must also show reasonable progress towards eliminating any unlawful gender-based wage differentials that its self-evaluation reveals. The AG has created an Excel spreadsheet tool that employers can use as a “starting point” to evaluate whether there are impermissible gender pay disparities in the workplace for comparable work. The AG cautions, however, that this spreadsheet is “meant only to assist in the evaluation of comparable job groupings that have 30 or fewer employees and a relatively simple pay structure.” With less than four months to go before this law takes effect, employers should now be evaluating whether to conduct this type of self-evaluative audit.
- Multi-State Employers. Finally, we note that the Guidance devotes significant attention to special considerations posed by multi-state employers. Employers with a multi-state presence are indeed covered by MEPA, so long as they have employees with a “primary place of work” in Massachusetts. The AG stresses that: “It does not matter where an employee lives.” So long as employee primarily works in Massachusetts, MEPA applies. The multi-state employer does not necessarily need to compare Massachusetts employees with employees in other states for purposes of analyzing its pay equity practices under MEPA. This is because “geographic location in which a job is performed” is one of the statutory exemptions that can justify different rates of pay for employees performing “comparable work.” The Guidance provides that: “Generally speaking, multi-state employers should ensure that employees within the same geographic area within Massachusetts are paid equally for performing comparable work unless excluding out-of-state employees from the analysis is not reasonable under the circumstances.” (emphasis added).