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Labor & Employment Alert >> Massachusetts Passes Pay Equity Act

August 15, 2016

Following suit with other jurisdictions across the country, the Commonwealth of Massachusetts passed Senate Bill 2119, an act to establish pay equity between employees of different genders, which will go into effect July 1, 2018.

The act prohibits employers from discriminating in the payment of wages and benefits based on gender and, specifically, by paying an employee less than another employee of a different gender for comparable work. In addition, employers considering applicants who will work in Massachusetts may not ask the applicants or their current or former employers about the applicants’ compensation history before the employer has made a written offer of employment, including compensation, to the applicant.

Exceptions to the act’s requirement of equal pay for comparable work include situations in which pay is different due to: (1) a bona fide system that rewards seniority (which shall not be reduced by leave due to pregnancy or protected family and medical leave); (2) a bona fide merit system; (3) a bona fide system that measures earnings by quantity or quality of production or sales; (4) different geographic locations; (5) different requirements in education, training or experience reasonably related to the job and consistent with business necessity; or (6) work-related travel requirements.

An employer cannot reduce pay to comply with law.

In addition, an employer cannot: (1) require that employees refrain from discussing wages, benefits and other compensation; (2) screen job applicants based on wages, ask applicants about prior wages, or require an applicant to disclose prior wages; (3) seek the salary history from the candidates’ current or former employer, except that a candidate can give written authorization to confirm wages “only after any offer of employment with compensation has been made”; or (4) retaliate against an employee for opposing or complaining about violations of the act, participating in an investigation into a violation of the act or because the employee inquires about wages with other employees.

Employers and employees cannot contract around the requirements or agree to a pay in violation of the act. In addition, employers must post a notice of employees’ rights under the act.

If an employer violates the act, the employer will be liable to the employee for unpaid wages, benefits and other compensation, plus an equal amount of liquidated damages, as well as attorneys’ fees and costs. The act has a three-year statute of limitations and provides for class actions. An employer may have an affirmative defense to a claim under the act if the employer can demonstrate that it conducted a good faith self-evaluation of its pay practices and has made reasonable progress in correcting pay disparity.

Bottom Line

Massachusetts employers have until July 2018 to correct any pay inequity between employees of different genders performing comparable work, taking into account seniority, location, travel and bona fide compensation plans. Employers should also update applicant forms and questions and interview practices to avoid asking applicants about their current salary or compensation history before they have been given an offer of employment that includes compensation.

In addition, New York, California and Maryland have also passed stronger pay equity laws requiring equal pay for employees of different genders for substantially similar work, and several other states have similar legislation pending.

Author(s)

HOWARD J. RUBIN
Partner/Co-Chair
212.468.4822
hrubin@dglaw.com
Labor & Employment