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Expansive legislation will broaden existing equal pay law
Salary histories have been banned in Massachusetts prior to job offers.
Employers in Massachusetts will need to update their job applications to remove salary inquiries to comply with a new law signed on Aug. 1.
The general purpose of the Massachusetts Pay Equity Act—which is scheduled to take effect in 2018—is to close the gender gap and make it unlawful for employers to pay men and women different rates for "comparable work," Christopher Kaczmarek, an attorney with Littler in Boston, told SHRM Online.
The law will also prohibit employers from screening job candidates based on their previous salary or asking salary-related questions until after an offer is made.
Additionally, employers won't be able to contact an applicant's former company to confirm the wage amount until after an offer is made, Kaczmarek said. Even then, employers will only be able to verify past wage amounts if they have written permission from the applicant.
This creates challenges for HR professionals, recruiters and managers who are conducting interviews and negotiating offers.
This is the first state law that prevents employers from asking job candidates about their salary history, said Amanda Baer, an attorney with Mirick O'Connell in Westborough, Mass. "As a result, many employers in the state will need to update their job application forms."
Furthermore, Baer said, salary questions have become so commonplace in recruiting that human resource professionals should consider providing interview training to hiring managers and other potential interviewers to make sure they are informed about the new law.
Massachusetts has had an equal pay law since 1945, but its equal pay standard has been narrowly interpreted by the courts, Baer said.
The existing law essentially requires a plaintiff to show "unequal pay for equal work," according to Mark Burak, an attorney with Ogletree Deakins in Boston. The standard will be considerably broadened under the new law.
"Comparable work," as referred to in the new law, means "work that is substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions." The law further provides that job titles or job descriptions alone can't be used to determine comparability.
As an illustration of the change, Burak said that a male janitor and a female hotel housekeeper may have comparable jobs under the new provisions even though the job titles and duties aren't the same.
He noted that the law is intended to help fix the gender-based pay gap for women, but it can also apply to men who are paid less than women in comparable jobs.
The act additionally bars employers from:
The act does provide employer protections for pay variations that are based on a bona fide merit system or a seniority system—as long as employee seniority isn't reduced for taking pregnancy-related leave or Family and Medical Leave Act time off. Certain pay variations based on geography, education and training, and travel requirements are also permissible.
Many employment-related laws have a short limitations period during which an employee can bring a claim, and the employee is usually required to go through an administrative agency's process before a claim can be brought in court, Baer explained.
The Massachusetts pay equity law, however, has a longer, three-year statute of limitations, and plaintiffs can immediately bring their claims in court.
Because it will be easier for workers to bring a claim, employers should take steps as soon as possible to make sure their pay practices are fair and equitable, she said.
The new law provides a defense from liability if an employer "completed a self-evaluation of its pay practices in good faith and can demonstrate that reasonable progress has been made toward eliminating compensation differentials based on gender for comparable work in accordance with that evaluation."
The state attorney general will issue a standard template for conducting self-evaluations, but it may be a while before employers receive that guidance, Kaczmarek said. In the meantime, employers should conduct evaluations in conjunction with legal counsel under the attorney-client privilege.
Burak said employers may want to engage an experienced labor statistician who is familiar with the relevant variables, challenges and appropriate data analysis.
Employers need to understand what it is that drives pay divisions in their companies and why there may be pay disparities, he said. They shouldn't just assume that the reason is gender bias.
"Companies should take a good look at internal practices and make sure they are using good data," he added. "How is starting pay set, and what factors drive increases and promotions?"
Employers should conduct a self-evaluation sooner rather than later, Kaczmarek said. This isn't the type of law that employers should look at a few months before the effective date.
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