The United States Department of Labor estimates, based on information from 2013 provided by the U.S. Census Bureau, women’s wages only average about .78 cents for every dollar a man earns. A few states have enacted legislation to combat this issue. Massachusetts joined these states on August 1, 2016, when Governor Charlie Baker signed into law the Massachusetts Equal Pay Act. This law goes into effect on July 1, 2018. On that date, employers must pay their employees wages on an equal basis without regard to gender.
Under the Equal Pay Act, an employer shall not discriminate on the basis of gender when it comes to the payment of wages. “Wages” are generally defined to include “all forms of remuneration for employment.” The law prohibits the payment of wages or salary at a rate less than that paid to an employee of a different gender for comparable work. However, a variation in wages may be based on:
- Seniority (but the time spent on leave due to pregnancy or other protected family or medical leave cannot reduce seniority);
- A merit based system;
- A measurement of the quantity or quality of production, sales or revenue;
- Geographic location where the job is performed;
- Education, training or experience reasonably related to the job; and
- Travel, if it is a regular a necessary condition of employment.
The law also prohibits employers from reducing the wages of an employee in order to comply with the Act. Employers cannot prohibit applicants from inquiring about wages or salary information, and employers cannot ask about the salary history of the applicant before a formal offer of employment.
The Equal Pay Act comes with some steep penalties for violations of this law. Employers will be liable for not only unpaid wages, but also an equal amount of unpaid wages as liquidated damages. Additionally, employers will be liable for attorney’s fees and costs. One unique aspect of this law that is not found in other state’s versions of this law - an employer may assert as an affirmative defense the fact that the employer conducted a good-faith self-evaluation of its own pay practices. The employer would also need to establish that it had been progressing towards the elimination of any gender-based pay differences within its workplace. This affirmative defense is only available so long as the self-evaluation occurred within three years before an employee’s claim, and the employer establishes a few other requirements referenced in this law.
Employees or applicants who believe an employer has violated this law may file a complaint with the court. The statute of limitations for an employee to assert a claim is three years from the date of the alleged violation. However, a violation under this law occurs “when a discriminatory compensation decision or other practice is adopted [by the employer], when an employee becomes subject to a discriminatory decision or practice or when an employee is affected by application of a discriminatory compensation decision or practice, including each time wages are paid, resulting in whole or in part from such a decision or practice.”
Employers may take steps now to address any issues with regard to wage disparities. Such steps include reviewing and amending their employment applications that may ask for an applicant’s salary history. Employers should also provide training to their human resources or other management employees that conduct recruitment activities as to the appropriate questions to ask during interviews, including to not request salary history information. Additionally, employers should review and amend any policies that prohibit employees from discussing wage information. Retaining an attorney to assist in a self-audit would also benefit an employer to ascertain whether the employer’s policies or practices disparately impact women during annual reviews or other wage decisions. An audit conducted by an employment attorney will provide an employer with the information related to its wage practices, and assist the employer with establishing a workplace with equitable wage practices.