The Amended Massachusetts Equal Pay Act (“MEPA”) will become effective in less than one week, on July 1, 2018. MEPA was a landmark pay equity law that inspired dozens of states, cities, and even private companies to require and to make similar changes with the goal of reducing and eliminating the gender pay gap. Employers and employees should review our discussion of the MEPA and our discussion of the Massachusetts Attorney General’s Office’s formal guidance about the Act for detailed discussions of the MEPA and how it is likely to be interpreted by the Attorney General.
Here are several steps employers can and should take to ensure they are ready to comply with the MEPA on July 1st.
First, strike all salary history inquiries from job advertisements and employment applications. Once effective, employers are prohibited from inquiring about a prospective employee’s salary history. This broadly applies to male and female applicants alike.
Second, stop asking prospective employees about their salary history in an interview setting, and train your managers to do the same. Once effective, employers are prohibited from asking applicants about their salary history during an interview. Employers should train their human resources and hiring personnel not to ask what has become an extremely common interview question. While employers can ask about an employees salary expectations or requirements, employers should train their human resources and hiring personnel not to probe further.
Third, do not discourage employees from discussing their compensation in the workplace and strike any rules prohibiting these discussions from policies, procedures, and employee handbooks. The MEPA makes it unlawful for an employer to “require, as a condition of employment, that an employee refrain from inquiring about, discussing or disclosing information about either the employee’s own wages, or about any other employee’s wages.” Employees must feel free to discuss their own wages among one another, and an employer cannot take adverse actions (for example demotion, termination) as a consequence for engaging in those discussions.
Of note, employers are not under any obligation to disclose an employee’s wages to another employee or a third party, and in fact may prohibit a human resources employee, supervisor, or any other employee whose job responsibilities require or allow access to other employees’ compensation information, from disclosing such information.
Finally, consider performing a self-evaluation of your pay practices to protect your business. The 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. However, 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 Attorney General created an Excel spreadsheet tool with instructions for using the tool that employers can use as a “starting point” to evaluate whether there are impermissible gender pay disparities in the workplace for comparable work. Employers should note that the tool will not definitely tell them whether they are in compliance with the law, but should be used to assist in gathering and analyzing relevant information.
This type of self-evaluation defense is the first of its kind, and has not been tested by courts. An employer considering performing this type of self-evaluation audit should consider hiring counsel to assist them in determining whether the self-evaluation was made in “good faith,” which employees should be considered “comparators,” and if the employer took “reasonable steps” after the audit to address any pay inequities discovered.