Massachusetts Employers: Get Ready for the Equal Pay Act
The updated Massachusetts Equal Pay Act (MEPA) becomes law on July 1, 2018, with the aim of addressing gender gaps in pay equity. The new regulations apply to nearly all Massachusetts employers, regardless of size and sector (i.e., private businesses, nonprofits, and state and municipal entities), though federal agencies are excluded.
MEPA also extends to employers based outside Massachusetts whose employees work primarily within the state’s borders, such as off-site and remote personnel. Employees covered by the law include full-time, part-time, seasonal, per diem, and temporary.
Equal pay for comparable work — with some caveats
MEPA’s intended goal is to ensure that women and men are paid equally for “comparable work” (as defined in the legislation). Employees may be compensated differently under any of the following provisions:
- Seniority system (must ensure that seniority calculations include time out for protected leaves of absence, such as those under the Family and Medical Leave Act)
- Merit system
- Education, training, or experience
- Business travel requirements
- Production or sales targets
- Geographic location
Employers should identify and document any compensation differences that fall under one or more of these provisions.
Two major changes in salary disclosures
If you’re an affected employer, this comprehensive piece of legislation will change your recruitment and selection processes. Two new rules in particular will shake up the norms at most organizations:
- Salary history mystery — You will need to revise both online and paper employment applications to remove requests for the applicant’s salary history. You may no longer ask job applicants what wages they were paid by previous employers prior to extending an offer that includes compensation.
- Pay-rate chit-chat — Many companies have a written policy prohibiting the discussion of wages among employees. MEPA disallows this, so it’s time to delete that policy from your employee handbook. The disclosure of pay rates can’t be used against an employee, and protections against retaliation are included in the law. (There is, however, an exclusion for those with access to pay rates as part of their jobs, such as some human resources and finance positions.)
Prepare and protect with a self-evaluation to avoid penalties
The possible consequences to an employer who is found to have violated MEPA include double unpaid wages and the employee’s reasonable attorneys’ fees.
MEPA recommends (but does not require) that employers conduct a self-evaluation to identify and correct instances of gender-based pay differences, and it provides guidance and methodologies for undertaking this self-review. This self-evaluation may protect your organization from claims of “discriminatory compensation” in the future.
The state law says that the “law provides a complete defense for any employer that, within the previous three years and before an action is filed against it, has conducted a good faith, reasonable self-evaluation of its pay practices.” A six-step guide and links to calculator tools and instructions are available in the Attorney General’s overview and FAQ document.
How we can help
Preparing for and complying with the new regulations call for revisions to your recruiting processes and internal practices, including training and education for those involved in recruitment and negotiation of employment offers.
CLA has a team of certified human resources professionals that can help you update your current policies and assist with the recommended (and potentially protective) self-evaluation process. We can also provide HR assessments, compensation review, handbook and policy creation, and labor and employment guidance. In conjunction with this, we advise you to consult with qualified employment law attorneys.
CLA does not provide legal advice.