As my colleague Christina Stoneburner wrote earlier in the week, we aren’t even through summer 2016, yet the number of new employment laws and regulations enacted that employers must contend with are already piling up. Massachusetts recently joined the fray, with Governor Baker signing into law earlier this month S.2119 (effective January 1, 2018), which addresses pay equity discrimination based on gender. Notably, the new pay equity legislation reiterates what Massachusetts and federal law have long stated: pay disparities based on gender are unlawful. However, this new law goes further, is more employee-friendly than ever, and specifically addresses neutral conduct that arguably affects gender pay equality.
One unique and notable component of the new law is a first-of-its-kind “ban the box” type prohibition that makes it unlawful to inquire regarding the prior salary history of prospective employees (similar to the prohibition of criminal conviction questions that many jurisdictions have recently adopted). Questions about prior salaries are extremely common and can be found on most employment applications. However, this practice must now be eliminated in Massachusetts. The intent of the legislature is to root out historic pay discrimination by forcing pay decisions to be made based on the job and not prior salaries. The law prohibits, any time prior to making an offer of employment (with salary offer), either directly requesting prior salary information from the prospective employee and/or his or her former employers, or indirectly researching the same. Moreover, employees cannot be prohibited from discussing their wages amongst themselves (although such policies are already prohibited by current interpretations of the National Labor Relations Act).
In addition, the law reiterates that actual pay differences based on gender are expressly prohibited where employees are engaged in “comparable work,” which is defined as any job(s) (regardless of titles) that require “substantially similar skill, effort and responsibility . . . under similar working conditions.” Moreover, the law clearly delineates the few bona fide non-discriminatory reasons allowed for neutral pay policies, namely: (i) seniority pay systems, (ii) merit pay systems, (iii) production or sales quality/quantity pay systems, (iv) geographic differences, (v) job relevant education, training, and/or experience, and (vi) job related travel. Lastly, the statute contains an anti-retaliation provision that prohibits taking retaliatory action against employees or applicants that oppose practices prohibited by the law.
An action enforcing the statute may be brought within three years of any discriminatory act, either by the attorney general or through civil litigation by the affected employee(s) and/or applicant(s), including but not limited to by class action. Damages recoverable include any owed or diminished wages and benefits, as well as additional “liquidated” damages (which doubles any owed compensation) and any reasonable attorneys’ fees and costs.
The one piece of good news for employers is that an affirmative defense is provided in the statute where an employer, within the prior three years, conducts a good faith self-evaluation of its pay practices in order to eliminate pay discrepancies based on gender. As a result, it is recommended that prior to the effective date of the act that employers conduct a thorough review of all employee handbooks, non-disclosure agreements, employment applications, and other new hire policies and forms, as well as review institutional pay structures and systems, to ensure compliance with the law. As always, your friendly Fox Rothschild attorneys are here to help in this regard.