Employers have responsibility to ensure pay equity

Equal pay for equal work is a deeply rooted American value, and federal and state laws have reflected this concept for many years.

In 1945, Massachusetts became the first state to pass an equal pay law. Last year, an updated Massachusetts Equal Pay Act (amending Chapter 149, Section 105A) went into effect to provide greater clarity on unlawful wage discrimination and to add new protections to ensure fair workplaces.

Gender pay gaps persist, however. According to the U.S. Bureau of Labor Statistics, on average, women working full-time in Massachusetts earn only 84.3% of what men earn. And nationwide, women made 80% of the average earnings for men in the fourth quarter of 2018. At the current pace, the gender pay gap would not be eliminated until approximately 2060. And the income gap for African American and Latina women in the U.S. compared to all men is at 60% and 55%, respectively.

The Massachusetts Equal Pay Act
Employers under the law cannot pay an employee of a different gender less if he or she performs “comparable work.” The Massachusetts Equal Pay Act defines “comparable work” as work that requires “substantially similar skill, effort, and responsibility and is performed under similar working conditions.” The statute also makes it clear that “a job title or job description alone shall not determine comparability.”

Attorney Regina Ryan, a principal with Louison, Costello, Condon & Pfaff who has extensive experience in employment and municipal law, says comparing jobs can be problematic and requires employers to rethink long-standing practices around pay-setting decisions.

MEPA allows differences in pay under certain conditions, including: a seniority system; geographic location of jobs; production, sales or revenue-based systems of pay; job-related differences in education, training or experience; a merit system; and differences in travel required by the jobs.

Equal pay practices
The following are several areas to be aware of with regard to complying with the MEPA and reducing exposure to liability claims.

Equal pay analysis: Although complex to conduct, an equal pay analysis can help to uncover and resolve pay inequity among employees, create equitable compensation plans and potentially avoid future liability claims. If pay disparities are discovered, employers should not reduce the pay of any employee in order to comply.

It is important to note that 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.”

Recruitment process: The statute makes it unlawful for employers to seek the salary or wage history of prospective employees before making an offer of employment that includes compensation. It is necessary to remove salary history from job applications and to train hiring managers to have compensation-related discussions in an appropriate manner. In addition, online searches of a job applicant’s salary history are prohibited during the recruitment and interviewing process.

Part-time versus full-time work: The MEPA also protects part-time, seasonal, per-diem and temporary employees. The Attorney General’s Office cautions employers not to discriminate based on gender in terms of the assignment or availability of part-time versus full-time work.

Employee wage discussions: Employees cannot be prohibited from discussing either their own wages or their coworkers’ wages, or from disclosing wage information to any person. The MEPA prohibits employers from contracting with employees to prevent them from discussing or disclosing wages. Employers cannot require an employee to keep his or her wages confidential in an offer letter, employment contract, nondisclosure agreement, employee handbook or similar document.

MEPA claim limitations: The statute makes it unlawful for employers to retaliate against any employee who exercises his or her rights under the law. An employee or job applicant has three years from the date of the alleged violation of the MEPA to file a claim in court. It is important to note that filing a complaint with the Attorney General’s Office or the Massachusetts Commission Against Discrimination will not extend the three-year statute of limitations.

MEPA violations: Employers found to be in violation of the MEPA will generally be liable for twice the amount of the employee’s unpaid wages, including any benefits and other forms of compensation, and will be required to pay the employee’s reasonable attorney fees and costs.

MEPA resources
The Attorney General’s Office offers detailed guidance to help employers comply with the law. The information includes an extensive section of frequently asked questions, sample policies and procedures checklists, and an employer self-evaluation guide. To learn more, visit
www.mass.gov/massachusetts-equal-pay-law or download the Attorney General’s Equal Pay Guide.

The Attorney General’s Office also advises employers to review their policies and procedures to ensure that they are in compliance with the MEPA. Employee applications, handbooks, offer letters and other materials may need to be revised, and any changes should be communicated to all employees, with updated training conducted as appropriate.

Written by Stephen Batchelder, MIIA Risk Management Director.