Massachusetts Equal Pay Act Update: Attorney General Issues Overview and FAQs
March 5, 2018
Amendments to the Massachusetts Equal Pay Act ("MEPA") take effect July 1, 2018. On March 1, 2018, the Office of the Attorney General issued FAQs (available here) on the amended law, defining key terms in the statute and providing further direction to employers.
MEPA provides that "No employer shall discriminate in any way on the basis of gender in the payment of wages, or pay any person in its employ a salary or wage rate less than the rates paid to its employees of a different gender 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." "Minor differences in skill, effort, or responsibility will not prevent two jobs from being considered comparable." (See our previous alert about MEPA here). MEPA applies to nearly all employers in Massachusetts.
Important takeaways from the FAQs include:
1) Definition of key terms in assessing "comparable work":
Skill. The requisite skill needed to perform a job includes factors such as experience, training, education, and ability required to perform the job. Skill is measured in terms of the performance requirements of a particular job, not in terms of the skills that an employee happens to have. Skills not necessary to perform a particular job are not relevant to determining whether jobs are substantially similar.
Effort. The amount of physical or mental exertion needed to perform a job, including factors which cause mental fatigue and stress, must be considered.
Responsibility. The degree of discretion or accountability involved in performing the essential functions of a job, as well as the duties regularly required to be performed for the job, are factors to consider when determining whether jobs are comparable to each other. Employers should consider whether the position involves supervision of other employees, and the degree to which the position involves decision-making such as developing policy and procedures, investments, or other such activities.
Similar working conditions. Environmental and other similar circumstances customarily taken into consideration in setting salary or wages must be considered. This includes factors such as the physical surroundings and hazards encountered by employees performing the job.
2) Job descriptions are not dispositive in determining whether job roles are comparable. The FAQs emphasize that whether jobs are "comparable" depends on the "skill, effort and responsibility required to perform the job." Job descriptions can be helpful if they accurately reflect these criteria, but employers should not rely on job descriptions alone.
3) Differences in pay for comparable work are only permissible when based on: (i) a system that rewards seniority; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production, sales, or revenue; (iv) the geographic location in which a job is performed; (v) education, training, or experience to the extent such factors are reasonably related to the job in question; and/or (vi) travel, if the travel is a regular and necessary condition of the job.
System. A plan, policy, or practice that is predetermined or predefined, used by managers or others to make compensation decisions, and uniformly applied in good faith without regard to gender. Employers may not retroactively apply the criteria to justify salary differentials.
System that rewards seniority with the employer. A system that recognizes and compensates employees based on length of service with the employer. The time employees spend on leave due to pregnancy-related conditions and protected parental, family, and medical leave may not be counted to reduce seniority for purposes of MEPA.
Merit system. A system that provides for differences in pay based on employee performance as measured through legitimate, job-related criteria.
Reasonably related to the job in question. An employee's education, training, or experience may justify a pay differential if, at the time the employee's salary or wages were determined, a reasonable employer could have concluded that the employee's education, training, or experience would help the employee to perform the particular job in a more efficient or effective manner.
Travel as a regular and necessary condition of employment. Whether travel is "necessary" will depend on the circumstances of the job, including whether alternatives, such as remote participation, are options offered by the employer. Travel will not be considered necessary because an employee prefers or chooses to travel when alternatives are reasonably available. Regular commuting to and from a work location does not constitute "travel" for these purposes.
4) Employers may not prevent employees from discussing either their own wages, their coworkers' wages, or from disclosing wage information to any other person or entity. This right may not be waived, meaning employers cannot include a requirement that an employee keep their wages (or a coworker's wages) confidential in an offer letter, employment contract, nondisclosure agreement, employee handbook, or similar document.
5) Employers may not ask a prospective employee for their salary or wage history. Employers may not circumvent this prohibition by using a third-party, such as a recruiter or a job placement agency. There are only two very limited situations in which an employer may seek a prospective employee's salary or wage history: (a) to confirm wage or salary history information voluntarily shared by the prospective employee; or (b) after an offer of employment with compensation has been made to the prospective employee.
According to the FAQs, information will qualify as "voluntarily disclosed" if a reasonable person in the prospective employee's position would not think, based on the employer's words or actions, that the employer suggested or encouraged the disclosure.
Properly discovering a prospective employee's salary or wage history does not entitle the employer to pay that individual less.
6) Employer self-evaluations may be used as a defense to liability. Employers have a complete defense to a legal claim brought against them under MEPA if the employer has conducted a good faith, reasonable, self-evaluation of its pay practices within the last three years and before the claim was filed. To take advantage of this affirmative defense, the self-evaluation must be reasonable in detail and scope, and the employer must show reasonable progress towards eliminating any unlawful gender-based wage differentials that its self-evaluation reveals.
The FAQs include a "Self-Evaluation Basic Guide for Employers" which describes a six-step process for conducting a self-evaluation.
The FAQs make clear that "what qualifies as a sufficient self-evaluation will vary depending on the size of the employer." The Attorney General offers a "Pay Calculation Tool" (available on page 21 here) for employers with 30 or fewer employees. For employers with more than 30 employees, a more complex statistical analysis may be necessary for a sufficient evaluation.
Every male employee within a job category is a potential comparator to female employees within the job grouping. This means that a woman might establish an unlawful pay disparity by showing she is paid less than one of the men in the grouping (as opposed to comparing her wages to the average wage of all men in the grouping).
7) Penalties. If an employer is found to have violated the Act, it may be liable for: payment of twice the amount of the employee's unpaid wages, payment of the affected employee's reasonable attorneys' fees, and other costs of litigation.
If an employer retaliates against an employee or prospective employee for exercising or attempting to exercise their rights under MEPA, the employer may be liable for additional damages.
For more information about MEPA, feel free to contact Allyson Kurker and Margaret H. Paget at Kurker Paget LLC.