On August 1, 2016, Massachusetts Governor Charlie Baker signed "An Act to Establish Pay Equity in the Commonwealth," a bipartisan bill which outlaws gender-based wage discrimination. Beyond the obvious, this law (which takes effect July 1, 2018) has significant ramifications for employers in Massachusetts, including those in the construction industry.
From the title, one might correctly assume that it will shortly be expressly illegal in Massachusetts to pay different wages for comparable work on the basis of gender. Significantly, however, the term "comparable work" is defined. Work that is "substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions" is considered comparable for the purposes of the law. Job titles are not considered in making the determination. Employers may consider experience, education, seniority, production and merit in setting wages. Other factors are at play, all set forth in the law.
Perhaps the most impactful aspect of the Equity Pay Law is its prohibition against asking prospective employees about their wage histories, or otherwise seeking that information during the hiring process. This question, which has long been a standard interviewing point before hire, will be barred by law (as are other efforts to derive similar information) on the theory that since wage history often forms a benchmark for new employers, an employee moving from one underpaid job to a new position would remain artificially underpaid if the wage history were a factor in hiring process. For similar reasons, it is also illegal to bar or attempt to bar employees from sharing information about their wages with one another.
The statute has some teeth. It is enforceable by private right of action brought by the employee or employees, or by the Attorney General. In either case, penalties include double the amount of underpaid wages, plus attorney's fees and other costs. Private actions may be brought for three years after the date of the alleged violation, and there is no requirement that an employee first pursue an affirmative discrimination claim with the Massachusetts Commission Against Discrimination.
Importantly, while employers may defend themselves against claims under the Pay Equity Act by establishing that they conducted a good faith self-evaluation of their wage determinations and are making reasonable progress towards eliminating inequity, such self-evaluations provide NO defense to similar claims under applicable Federal law and there may in fact be negative repercussions to such an evaluation, if raised in the context of a Federal claim. As is always the case, well-intentioned but ill-informed efforts aimed at compliance may have unintended consequences, and employers would be wise to make careful, educated decisions in this area. Industries like construction, where gender diversity is increasingly emphasized, will be affected.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
