Massachusetts Passes Pay Equity Bill Restricting Employers From Inquiring Into Applicants’ Wage History
Massachusetts has passed an amendment to the state’s equal pay law aimed at strengthening prohibitions on gender discrimination in the payment of wages for comparable work. The new bill, signed by Governor Charlie Baker (R) this week and effective starting in July 2018, provides a definition of “comparable work” for purposes of analyzing pay equity under the law. The bill also prohibits employers from requesting or inquiring into the salary history of job applicants and from restricting employee discussions about their own or another employee’s wages.
Comparable Work Defined
The bill defines “comparable work” as “substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions.” However, the bill further states that “a job title or job description alone shall not determine comparability.”
Mitigating factors that may legitimately warrant a difference in wages, benefits and other compensation for comparable work include:
a bona fide seniority system, provided that leave for pregnancy-related conditions or protected parental, family or medical leave is not taken into account for seniority purposes;
a bona fide merit system;
a bona fide system of measuring earnings based on quantity or quality of sales or production;
the geographic location in which a job is performed;
education, training or experience if such factors are “reasonably related” to the particular job and consistent with business necessity; or
travel, if a “regular and necessary condition” of the job.
Similar to the federal Equal Pay Act, the bill prohibits employers from reducing the wages of an employee for the sole purpose of complying with the law. Beyond that, we will have to wait to see whether Massachusetts’ new definition of “comparable work” is interpreted more expansively than in the federal statute. The first three mitigating factors mirror the federal law, while the latter three are new.
Prohibition on Inquiring Into Wage History
In what is perhaps the most unique aspect of the bill, employers are prohibited from screening job applicants based on their wage histories by either: (i) requiring that an applicant disclose prior salary, wages, or benefits during the application, interview, or hiring process; or (ii) requiring that an applicant’s prior wages satisfy minimum or maximum criteria. The bill also prohibits employers from inquiring into or seeking the salary history of a job applicant directly from any current or former employer unless authorized to do so in writing by the applicant after an offer of employment with compensation has already been extended. Employers are not prohibited from collecting salary information through other means.
Prohibition on Restricting Employee Wage Discussions or Inquiries
Similar to the restrictions already set forth under the National Labor Relations Act, the bill prohibits employers from restricting employee inquiry into or discussion about their own wages or that of other employees. Employers may, however, prohibit human resources or other employees with access to compensation information from disclosing such information without the prior written consent of the employee whose information is being sought.
The bill establishes an affirmative defense from liability for an employer who, within the three years prior to the commencement of an action for equal pay violations, has completed a good faith self-evaluation of its pay practices and can demonstrate that “reasonable progress” has been made towards eliminating wage differentials based on gender for comparable work.
While the bill aims to provide guidance on what constitutes “comparable work” under the law, the definition remains arguably vague and subject to interpretation, including how the “substantially similar” standard should be analyzed. Until courts have the opportunity to interpret this new language, employers will likely continue to face uncertainty as to their obligations in analyzing wage differentials under the law. That guidance likely will be long in coming, however, since the law does not go into effect until July 2018 and it is unlikely that courts will be asked to interpret the law until then.
Nevertheless, employers are encouraged to take steps to ensure compliance with the new law, particularly with regard to its prohibitions on inquiries into wage history during the hiring process. Employers should review job applications and interview materials to ensure that they do not include questions regarding compensation or benefit history. Employers should also ensure that managers, human resources staff, and other individuals who participate in hiring (including third party recruiters) are aware of the obligations under the new law and refrain from making any prohibited inquiries of applicants at any stage of the hiring process.