By Joan Farrell, JD, Senior Legal Editor

The governor of Massachusetts recently signed significant new equal pay legislation into law. Like the equal pay laws recently enacted in other states, the Massachusetts law provides a definition for “comparable work” and protects employees who discuss their compensation with coworkers. But the new law differs from the equal pay laws in other states in one important aspect.

Unlike the laws in other states, the Massachusetts law prohibits employers from asking about a job applicant’s pay history—at least until after the employer has extended an offer of employment that includes compensation. Many employers have a practice of basing a new employee’s pay on his or her pay history rather than making an offer based on the value of the position. This can be a disadvantage to those who have entered the workforce at a lower pay rate and have historically been paid less; and it can perpetuate gender-based pay disparity.

Under the new law, an employer can require a prospective employee to confirm prior wages or salary, or to permit the prospective employer to do so, if the prospective employee has voluntarily disclosed such information. The employer can also confirm salary information after it has extended an offer of employment with compensation to the prospective employee. There are exceptions built into the law that prohibit disclosure of wage information by human resources employees, supervisors, and other employees who have access to compensation information.

Another key component of the new law is a pay transparency provision that makes it unlawful for employers to prohibit employees from inquiring about, discussing, or disclosing information about their own wages or about any other employee’s wages. The law does not obligate an employer to disclose an employee’s wages to another employee or to a third party.

In prohibiting gender-based wage discrimination for comparable work, the law defines “comparable work” as work that requires substantially similar skill, effort, and responsibility and is performed under similar working conditions. “Working conditions” includes the environmental and other similar circumstances customarily taken into consideration in setting salary or wages, including reasonable shift differentials, and the physical surroundings and hazards encountered by employees performing a job.

The law permits variations in wage payments if based on:

• A system that rewards seniority with the employer; however, time spent on a pregnancy-related leave and protected parental, family, and medical leave cannot reduce seniority;
• A merit system;
• A system that measures earnings by quantity or quality of production, sales, or revenue;
• The geographic location in which a job is performed;
• Education, training, or experience to the extent such factors are reasonably related to the particular job in question; or
• Travel, if the travel is a regular and necessary condition of the particular job.

Like federal law under the Lilly Ledbetter Fair Pay Act of 2009, each time an employee is affected by the application of a discriminatory compensation decision or practice—including each time wages are paid—a violation of law occurs. This means that each paycheck that reflects a past discriminatory pay decision restarts the statute of limitations for filing a discrimination claim. Under the new law, employees must file their lawsuits within 3 years after the date of an alleged violation.

The new law provides an affirmative defense to liability for employers that have:

• Completed a self-evaluation of pay practices in good faith within the previous 3 years and prior to the commencement of the action, and
• Can demonstrate that reasonable progress has been made towards eliminating wage differentials based on gender for comparable work, if any, in accordance with that evaluation.

Evidence of an employer’s self-evaluation or remedial steps is not admissible as evidence of a violation that occurred before the date the self-evaluation was completed, or that occurred:

• Within 6 months after the self-evaluation was completed, or
• Within 2 years after the self-evaluation was completed if the employer can demonstrate that it has developed and begun implementing in good faith a plan to address any wage differentials based on gender for comparable work.

The new law takes effect July 1, 2018, and because of the protection built into the law for employer self-audits, employers may want to use the time to conduct audits and make necessary adjustments to comply with the law.

Additional resources

• Equal Pay/Comparable Worth topic analysis
• Salary Center