The Massachusetts Legislature recently passed legislation (“the Pay Equity Act”) modifying Massachusetts’ equal pay statutes, which will take effect on January 1, 2018.  While discriminating on the basis of gender in compensation to employees has long been forbidden under multiple state and federal statutes, this new legislation contains important provisions affecting Massachusetts employers.  For example, employers can no longer screen applicants based on their compensation history, cannot prohibit employees from discussing or disclosing their salaries, and cannot request a potential employee’s compensation history from his or her former employer until after an offer of employment, including compensation, has been made, and only then with the potential employee’s consent.

Importantly, the new legislation creates an affirmative defense to a claim brought under the Pay Equity Act and the Massachusetts general anti-discrimination statute, M.G.L. c. 151B, for employers who have completed a self-evaluation of their pay practices in good faith within the past three years, and who can demonstrate that reasonable progress has been made towards eliminating compensation differentials based on gender as a result of that self-evaluation.  We expect that the Attorney General will issue regulations clarifying how to complete a self-evaluation that will qualify an employer for this defense.  Employers would be wise to conduct such a self-evaluation both to ensure that their practices are in compliance with employment laws and to create a potential defense to future litigation.  Please feel free to contact the Employment Law Group if you are interested in our assistance in conducting such a self-evaluation.

The heart of the Pay Equity Act is the prohibition of discrimination on the basis of gender in the payment of wages and benefits for comparable work unless the variation in pay is based on (1) a bona fide seniority system, (2) a bona fide merit system, (3) a bona fide system which measures earnings by quantity or quality of production or sales, (4) geographic location (5) education, training, or experience to the extent such factors are reasonably related to the particular job in question and consistent with business necessity, or (5) travel, if such travel is a regular and necessary condition of the particular job.  Employers may not reduce the compensation of any employee in order to comply with the provisions of this statute.

This is a “strict liability” statute and a plaintiff need not prove discriminatory intent in order to bring a successful claim.  In other words, an employer may be found liable under this statute even if there was no intent to pay employees different compensation based on their gender.  Employees may bring a private lawsuit directly under the Pay Equity Act, or the Attorney General may bring a civil lawsuit on behalf of employees.  Damages include twice the amount of unpaid wages and attorney fees.  The statute of limitations for bringing a claim is three years.

As was noted above, the Pay Equity Act establishes several prohibited practices:

  • Employers may not prohibit employees from discussing or disclosing their own wages and benefits, or the wages and benefits of other employees.[1]  An employer may, however, prohibit employees whose job duties allow access to other employees’ compensation information from disclosing such information without prior written consent from the employee whose information is sought.
  • Employers may not screen job applicants based on their wages or salary history. Specifically, employers may not require that an applicant’s prior wages or benefits meet a minimum or maximum criteria, or request that an applicant disclose prior wages or salary history as a condition of being interviewed or considered for a position.
  • Employers may not request the salary history of a prospective employee from any current or former employer, except after a formal offer of employment, including compensation, has been made, and with the consent of the prospective employee.

Finally, the Pay Equity Act contains an anti-retaliation provision, which prohibits employers from taking any adverse employment action against an employee who (1) opposed a practice made unlawful by the Pay Equity Act; (2) made, or is about to make, a complaint or institute a proceeding under the Pay Equity Act; (3) testified, assisted, or participated in an investigation falling under the Pay Equity Act; or (4) disclosed or discussed his or her wages or the wages of another employee.

If you have any questions or concerns, kindly contact us to discuss.

[1] Such policies were already considered unlawful under federal labor laws, but their inclusion in this state law creates a new avenue for an aggrieved employee to bring a lawsuit seeking compensation.