The Massachusetts legislature recently passed the Pay Equity Act in 2016 that prohibits all employers from paying different wages to male and female employees who are performing comparable jobs. The new law will go into effect on July 1, 2018.
While employers were previously required under state and federal discrimination laws to pay equal wages to male and female employees who perform the same job, the Pay Equity Act expands an employer’s obligation to pay men and women the same for doing different but comparable jobs. The new law replaces the Massachusetts Equal Pay Act and expands upon the old law’s “comparable work” standard that triggers an employer’s duty to provide equal pay.
Under the new law “comparable work” is defined as “work that is substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions.” Violation of the law will subject employers to liability for double the amount of an employee’s unpaid wages, measured as the difference between that employee’s pay and the pay received by an employee doing comparable work, plus attorneys’ fees and costs.
While the Pay Equity Act prohibits pay discrimination based on gender, it does still allow employers to take into account other factors when determining differences in compensation, such as seniority, earnings, education and experience.
The Pay Equity Act also provides for an affirmative defense to liability for employers that have (1) completed a self-evaluation of its pay practices in good faith and (2) can demonstrate that reasonable progress has been made towards eliminating compensation differentials based on gender for comparable work. Employers who qualify for this affirmative defense will avoid liability against claims for wage discrimination for three years following completion of the evaluation. The Act, however, provides very few guidelines to assist employers in implementing this self-evaluation other than to say that the evaluation may be “reasonable in detail and scope in light of the size of the employer” or “consistent with standard templates or forms issued by the attorney general.” It is expected that the attorney general will offer further guidance to assist employers in qualifying for this affirmative defense before the law goes into effect.
The Pay Equity Act is an important change to Massachusetts wage and discrimination law that all employers must be aware of. Even though the law does not go into effect until July 1, 2018, employers of all sizes should be proactive in assessing their compensation practices now to make sure they will be in compliance. Some employers should also consider conducting a self-evaluation in accordance with the law in order to protect themselves against future claims. While the new law appears to clarify the comparable work standard, it is certain to generate substantial litigation after it goes into effect that will shed light on how courts apply the new standard and we will continue to provide updates here. Employers with questions or concerns regarding the Pay Equity Act may contact a member of our Employment Law practice group.
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