New Pay Equity Law Means Employers Must Prevent Gender-Based Wage Disparities

In the wake of passage of the new pay equity law in Massachusetts, employers again have work to do. To prevent getting caught up in what is certain to be another fertile area of employment litigation, both individually and on class-wide bases, employers must review current pay structures, implement new policies, and train anyone involved in the hiring process. Fortunately, they’ll have plenty of time to do so and those that comply may have an absolute defense to liability under the equal pay statute.

The law was passed at the end of the 2016 legislative session and signed into law by Gov. Baker. It replaces an existing law that, though it nominally banned pay discrimination based on sex, was a virtual nullity due to evidentiary hurdles set up by the Supreme Judicial Court. Under the new law, an employer that pays employees less based on gender will face liability for double the amount of any underpayments, plus plaintiffs’ legal fees and costs. Complaining employees of either gender will succeed if they prove that the work in question is comparable – that is, it “requires substantially similar skill, effort and responsibility and is performed under similar working conditions.” Job titles are irrelevant. Where workers of different genders perform jobs that satisfy these criteria and one is paid less than the other, employers will be exposed to lawsuits.

Fortunately for employers, the statute won’t take effect until July 1, 2018. As additional protection, the legislature included language to protect employers that perform self-evaluations of their pay practices and make reasonable progress toward eliminating any they may identify. The Massachusetts Attorney General may issue regulations to help guide self-evaluations, but employers are free to devise their own processes to do so. Because the new law bars employers from asking applicants about salary histories prior to a job offer, all should review job applications to remove any questions on the subject and train managers not to inquire about salaries during job interviews. Policies that may bar employees from discussing their salaries must also be amended as they will become illegal under the equal pay law.