What You Need to Know About the New Pay Equity Act

On August 1st, 2016, Governor Baker signed the Pay Equity Act.  This Act prohibits employers from discrimination between genders in paying wages and other compensation for comparable work.

Currently, employers cannot pay employees of different genders differently for comparable work.  In determining if work is comparable, courts look to see if the substantive content of the job and the skills, effort, responsibilities and working conditions are similar.

Under the new Act, which becomes effective on January 1, 2018, additional new restrictions apply:

  • Comparable work is defined to include work that is “substantially similar in that it requires substantial similar skill, effort and responsibility and is performed under similar working conditions.”
  • Pay variations are allowed based on:
    • Seniority
    • Merit
    • Quality or quantity of production, sales or revenue
    • Geographic location
    • Relevant education, training or experience
    • Travel, if regular and necessary for the position.
  • Employers may not reduce salaries in order to comply with the law.
  • Any agreement or contract between employer and employee to work for less than the pay that the employee is entitled to will not be a defense.
  • Employees may discuss or disclose their salaries without retribution from employers. However, employees with access to pay data, such as HR personnel, may not disclose the information without written authorization from the employee.  Employee handbooks should be amended to remove language that penalizes employees for talking to co-workers about their pay.
  • Employers may not ask applicants about how much they were getting paid at prior jobs until after an employment offer has been made and the pay has been personally negotiated.  However, prospective employees may voluntarily offer information about their salaries if they wish.
  • Employers may not retaliate or discharge employees who have complained about gender-based pay discrimination.

The new law expands the statute of limitations under the current Equal Pay statute from one to three years.  Employees will no longer be required to pursue a general claim of intentional discrimination at the Massachusetts Commission Against Discrimination before filing a separate equal pay claim in court.

The Pay Equity Act goes into effect on January 1, 2018, so now is the time for employers to audit their pay practices, interviewing practices, and employee handbooks to ensure they will be compliant with the new law.

If you have any questions, or would like assistance in implementing this new law in your organization, contact us at mtaylor@taylorhrgroup.com.

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