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New Pay Equity Law Goes into Effect on July 1, 2018

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The Massachusetts Pay Equity law goes into effect on July 1, 2018. The law intends to prohibit pay inequity by gender for “comparable work.” The Pay Equity law broadens and strengthens the protections afforded under current law by changing the analysis from “equal pay for equal work” to equal pay for “comparable work.” The law defines “comparable work” as work that is “substantially similar in that it requires substantially similar skill, effort, and responsibility and is performed under similar working conditions.” Employers are barred from asking or seeking salary history from prospective employees. Additionally, employers may not restrict or forbid discussion of salary among employees.

Employees are not required to file a charge of discrimination with the Massachusetts Commission Against Discrimination prior to asserting a claim in court. Employees may place a claim within three years of the alleged violation. Unlike the Equal Pay Act of 1963 and other state pay equity laws, the law does not contain the “bona fide factor other than sex” defense for employers. But, the law does permit compensation differentials if the difference in pay is based on: (i) a system that rewards seniority with the employer; provided, however, that time spent on leave due to a pregnancy-related condition and protected parental, family and medical leave, shall not reduce seniority; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production, sales, or revenue; (iv) the geographic location in which a job is performed; (v) education, training or experience to the extent such factors are reasonably related to the particular job in question; or (vi) travel, if the travel is a regular and necessary condition of the particular job.

Violations of the Pay Equity law will expose employers to damages in the sum of two times the employee’s unpaid wages (the difference between employee’s wages and wages paid to a comparable employee performing comparable work), plus attorney’s fees and costs.

In order to ensure compliance with the law, employers should review their employee handbook, hiring procedures, job descriptions, application forms, interview procedures, and confidentiality policies. Employers can defend themselves against liquidated damages by completing, in good faith, a self-evaluation of the company’s pay practices and show that the company is making “reasonable progress… towards eliminating wage differentials based on gender for comparable work”. Employers can create their self-evaluation. Employers can first identify positions that involve comparable work. Next, the employer can assess the pay to identify any pay equity issues among the genders. The employer will need to determine if the disparity is unlawful or if there is a protected reason for the discrepancy permitted under the law. The Attorney General’s Office is currently developing standard templates and forms for the self-evaluation. Now is a great time to be proactive and start to identify and correct wage inequity before the implementation of the law this July.

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