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August 5, 2016

Massachusetts Adopts Strict Equal Pay Requirements

Massachusetts Governor Charlie Baker has signed into law amendments to the Massachusetts Equal Pay Act that substantially expand an employer's obligation to ensure equal pay. The amendments prohibit differences in pay for "comparable work" and generally preclude employer's from asking prospective hires about their salary histories until after the employer makes a job offer with a compensation term.

Signed on August 1, 2016, the new law amends Massachusetts General Laws chapter 149 section 105A (the "Act") and will take effect in 2018. The Act will be enforced by the Massachusetts Attorney General but employees will also have a right to bring a private right of action for violations of the Act.

The Act relies on five overarching provisions designed to eliminate the gender wage gap.

1. A broad definition of "comparable work." Rather than focus on "equal pay" for "equal work," beginning in 2018, the Act will prohibit differences in pay for "comparable work," defined as "work that is substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions." Precisely how that language will be interpreted will depend on any regulations issued by the Attorney General under the Act and, ultimately, judicial decisions. Despite the potential breadth flowing from the "substantially similar" language, an employer may avoid liability for wage variations under certain conditions, including seniority, merit systems, production metrics, geography, education, training and experience, and travel requirements.

2. Employers cannot require disclosure of compensation history. Employers are prohibited from asking applicants about prior compensation or seeking such information from an applicant's current or former employer. Employers may seek compensation information after an offer of employment with compensation has been negotiated with the prospective employee, or after the prospective employee has disclosed such information voluntarily.

3. Employees may discuss wages. Employers may not prohibit employees from inquiring about, discussing or disclosing salary information, although employers may prohibit managers and supervisors from disclosing salary grids or other information related to the employer's pay practices.

4. Affirmative defense for good faith self-evaluation and progress toward closing the gap. The law provides an affirmative defense for employers that: (i) undertake a good-faith self-evaluation of their pay practices; and (ii) demonstrate reasonable progress has been made toward eliminating gender-based wage disparities. While self-evaluations will likely prove helpful, they should be conducted with care and after consultation with counsel.

5. No pay cuts to equalize pay. Employers cannot reduce any employee's compensation solely to comply with the law.

In addition to the issues identified above, the Act contains standard protections against retaliation for exercising protected rights, damages measured by unpaid wages, an equal amount as liquidated damages (in other words, the unpaid wage amount is doubled), attorneys' fees and costs, and a three-year statute of limitations, with a violation of the Act deemed to occur each time wages are paid. Unlike many other Massachusetts statutes, the Act does not require an initial filing with the Massachusetts Commission Against Discrimination.

If you have any questions about compliance with the new regulation, or you are unsure how they will impact your business, please contact the Labor & Employment attorney at Barclay Damon with whom you normally work or any attorney in our Labor & Employment Practice Area.


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