Massachusetts Moves Closer to Toughening Pay Equity Requirements
The Massachusetts Senate has passed a bill to amend the state’s Equal Pay Act that would impose more rigorous equal pay obligations on employers by prohibiting certain conduct. The House is considering the bill.
Under the Equal Pay Act, employers are prohibited from discriminating against employees on the basis of gender in the payment of wages or salary for comparable work.
The amendment would prohibit employers from engaging in the following conduct:
Screening job applicants based on wage or salary history, including:
requiring an applicant’s prior wage or salary to satisfy the employer’s criteria, or
requiring an applicant to disclose prior wage or salary history as part of the application process.
Seeking the salary history of an applicant from a current or former employer, unless the prospective employer made an offer of employment to the applicant, and the applicant provided written authorization to the employer to confirm wage or salary history.
Prohibiting employees from discussing their compensation with coworkers or colleagues (although the National Labor Relations Act already prohibits such conduct, the proposal creates a private right of action under state law for employees to enforce their rights).
In addition, the bill enhances the enforcement scheme of the Equal Pay Act and extends the statute of limitations for claims under the Equal Pay Act from one year to three years. It also states that employees need not file a complaint with the Massachusetts Commission Against Discrimination or the Attorney General’s Office before filing a private civil action in court.
To foster compliance, the bill creates an affirmative defense for employers that have completed a good faith “self-evaluation” of their pay practices within the past three years. Employers may design their own “self-evaluation,” so long as it is reasonable in detail and scope in light of the employer’s size. Alternatively, the bill provides that employers may utilize templates, forms, and guidance that will be issued by the Massachusetts Attorney General’s Office, the agency charged with administering the statute.
If the bill is enacted, the amendment would become effective on January 1, 2018, which provides employers with a window period in which to engage in “self-audits.” Massachusetts would join California and New York in expanding pay equity requirements for employers.
The Massachusetts Attorney General’s Office has flexed its muscle on the pay equity issue. It has issued demand letters requesting detailed pay equity information from employers. The demand letters require that employers provide their employees’ names, address, sex, race, ethnicity, classification (full-time or part-time), hire date, title, salary, work location, job description, and total compensation from the prior year, among other things. The information gathered would be analyzed to determine whether employers’ pay practices differ based on gender or race.
The initiatives in Massachusetts reflect the broader, nationwide regulatory emphasis on pay equity. In addition to the California and New York laws, on February 1, 2016, the Equal Employment Opportunity Commission and the Office of Federal Contract Compliance Programs issued a proposal to expand EEO-1 reporting obligations to require employers with at least 100 employees to report wage data as part of the EEO-1. (For details, see our article, EEOC Proposes to Collect Pay Data from Employers.)
Regardless of the outcome of the Massachusetts proposal, the increased regulatory scrutiny on pay equity issues should spur employers to consider conducting internal audits of their pay practices to address any issues.