Massachusetts Passes Tough Pay Equity Law

Author: Rena Pirsos, XpertHR Legal Editor

August 9, 2016

Massachusetts has passed The Act to Establish Pay Equity (the Act) - a comprehensive pay equity law that places many significant new restrictions on employers. The Act prohibits employers from discriminating between genders in regard to the payment of wages and other compensation for work that is comparable, but under much broader and detailed terms than current Massachusetts law.

Under current state law, employers are prohibited from paying workers of opposite genders differently "for work of like or comparable character or work on like or comparable operations." Based on court interpretations in pay discrimination cases, the determination boils down to an analysis of whether:

  • The substantive content of the jobs in question is comparable; and
  • The skills, effort, responsibilities and working conditions involved are similar.

The new Act:

  • Provides a concrete definition of comparable work to include work that is "substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions";
  • Permits pay variations based on:
    • Seniority;
    • Merit;
    • Quality or quantity of production, sales or revenue;
    • Geographic location;
    • Relevant education, training or experience; and
    • Travel, if regular and necessary for the position.
  • Prohibits pay reductions solely to equalize pay between employees of the opposite gender;
  • Prohibits employers from preventing employees from asking about, discussing or disclosing pay information. However, employees (e.g., HR professionals) with access to pay data may not disclose the information without the affected employee's written authorization;
  • Restricts employers from seeking a job applicant's wage or salary history until after an employment offer has been made to the applicant and his or her pay has been personally negotiated; and
  • Prevents employers from retaliating against or discharging employees who have engaged in protected conduct, such as complaining about gender-based pay differences.

Fortunately, the Act's effective date of January 1, 2018, gives employers ample time in which to perform an in-depth audit of their pay practices and make any necessary changes to ensure that they will be in compliance with the sweeping new requirements and prohibitions. In addition to reviewing hiring practices and pay structures, employers should determine whether their handbooks and/or policies will need to be updated. Note that the state attorney general is authorized by the Act to issue implementing regulations, which may provide employers with additional compliance guidance before the Act goes into effect.

Massachusetts is now the third state in the past year to pass an aggressive pay equity law. The two other states that have enacted similar legislation include California and New York.