A closer look at Massachusetts’ equal pay legislation

Issue March/April 2017 By Kimberly A. Klimczuk

In August 2016, the Massachusetts legislature passed the Pay Equity Act, amending its prior equal pay law. But will the new law actually achieve its stated purpose of establishing pay equity? Or is this just a symbolic gesture designed to score political points? Does the new law create more ambiguities than it resolves? In this article we'll look at the new Pay Equity Act, how we got here, and where we are likely to end up.

It's long been illegal for Massachusetts employers to pay women less than men (or men less than women, for that matter) for comparable work. In fact, Massachusetts was the first state ever to implement an equal pay law, with the passage of the Massachusetts Equal Pay Act in 1945. Congress took a bit longer, passing its Federal Equal Pay Act in 1963, and of course the following year saw the passage of Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination - including discrimination with regard to pay - on the basis of gender. So why is it that, over 70 years after the state outlawed pay discrimination, women, as a whole, still do not earn as much as their male counterparts?

There are many different theories about the answer to that question, but one contributing factor is that, until recently, the term "comparable work" was defined fairly narrowly under state law. The preeminent Massachusetts case interpreting the Massachusetts Equal Pay Act is Jancey v. School Committee of Everett (Massachusetts Supreme Judicial Court, 1995). In 1989, female cafeteria workers sued Everett Public Schools under the Equal Pay Act, alleging that they work they performed for the school was comparable to the work performed by the school's custodians, and therefore, the cafeteria workers should receive pay equal to that of the custodians. At the time the lawsuit was filed, the hourly rate of the cafeteria workers ranged from $6.44 to $6.85 per hour, while that of the custodians ranged from $10.76 to $12.73 per hour. Notably, at the time the lawsuit was filed, Everett Public Schools had never employed a male cafeteria worker and had never employed a female custodian.

The trial judge found in favor of the cafeteria workers, finding that the work performed by the cafeteria workers was, in fact, comparable to the work performed by the custodians. Specifically, the positions required no prior experience, training or education; they both involved exposure to extreme temperatures; both positions required work with various chemicals/cleaning agents; and the positions required a similar level of physical and mental exertion. The Supreme Judicial Court overturned the trial court's decision, however, and established a new two-part test for demonstrating "comparable work" that severely limited the applicability of the state's Equal Pay Act. This new test required employees to prove that the positions "entail comparable skill, effort, responsibility, and working conditions" and that the jobs do not "differ in content." Thus, under this test, employees could prevail only if they proved they were paid less than a person of the opposite sex who held the exact same job as they did.

Fast forward to 2016, where the persistent gender pay gap was front and center in the media, in part due to the presidential election. Several states passed pay equity legislation last year, including Massachusetts. Recognizing the limitations imposed by the SJC on Massachusetts' existing pay equity legislation, the Massachusetts legislature broadened the scope of the Equal Pay Act, amending the statute to provide a more expansive definition of "comparable work." Under the new law, "comparable work" is defined as "work that is substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions; provided, however, that a job title or job description alone shall not determine comparability." There is little doubt that had this standard been in place when Jancey was decided, the result would have been very different. Still, while the law removes the ambiguity surrounding whether it applies only to men and women in the exact same job, it creates new ambiguities, such as what constitutes "substantially similar" skill, effort and responsibility. Compare a management-level engineer with a management-level accountant. To the extent both are tasked primarily with management responsibilities, versus more hands-on engineering or accounting work, one could make the argument that the two management positions require substantially similar skill, effort and responsibility and are performed under similar working conditions. If employers have to start comparing salaries across different departments, compliance with the law may turn into a logistical nightmare.

The law does acknowledge that there may be valid reasons that a man and a woman may be paid differently for doing the same job, but they are limited to the following: 1) seniority (but the law explicitly prohibits taking into account FMLA leave, parental leave, or leave due to a pregnancy-related condition when calculating seniority); 2) merit systems (the application of which raise their own nondiscrimination issues); 3) systems of measuring earnings by "quantity or quality of production, sales or revenue" (i.e., piece work or commissions-based compensation); 4) geographic location of the job; 5) education, training or experience, but only to the extent those factors are "reasonably related" to the job; and 6) travel that is a "regular and necessary part of the job.

Another significant provision in the new law prohibits employers from requiring applicants to reveal their wage or salary history or to seek wage or salary history from an applicant's current or former employers. The rationale is that if women are underpaid due, at least in part, to institutional discrimination, basing starting pay on what women were earning in their last job will only serve to perpetuate the discrimination. For example, if a woman and a man apply for the same position, and the female applicant had been paid $40,000 per year for that job while the male applicant had been paid $50,000 per year for that same job, the employer is likely to offer the female applicant a lower starting salary than the male applicant. One way to minimize the impact of prior discrimination on future employment is for employers to base starting pay on what the job is worth to them, not on what they can convince an employee to accept.

When I discuss this provision with HR professionals, I am frequently asked, "But we can still ask what an employee's salary expectations are, right?" At this point, asking an applicant about salary expectations does not violate the letter of the law, but it may violate the spirit of the law. After all, a person who has been paid less is likely going to have lower salary expectations than a similarly-qualified person who has been paid more for doing the same work. But before the law goes into effect on July 1, 2018, we will likely receive some further guidance from the Attorney General's office on this point. The AG's office has the authority to issue regulations interpreting the law, and such regulations may very well define "seek the wage or salary history" to include asking questions about an applicant's salary expectations.

The law also prohibits employers from requiring that employees refrain from discussing or disclosing information about their own wages or other employees' wages. The National Labor Relations Act has long protected employees' right to discuss their own wages with coworkers, but there previously had been no protection for sharing the wages of others. In addition, the NLRA only applies to non-management employees; Massachusetts' Pay Equity law applies to all employees. The idea is that employees who are free to discuss their wages will be more likely to know whether their equal pay rights are being violated and thus better able to assert their rights under the law.

Employees under the new law will have three years to file any lawsuit alleging violation of the Pay Equity law (versus the prior law's one-year statute of limitations), and, unlike in other complaints of discrimination, employees are not required to file an administrative charge with the Massachusetts Commission Against Discrimination before pursuing their claims in civil court. In addition, the law establishes an affirmative defense for employers who complete a good-faith self-evaluation of their pay practices and demonstrate "reasonable progress" toward eliminating any wage differentials.

With an effective date of July 1, 2018, it will be a while before we can measure the effect of this new law. Will the law achieve its purpose? Only time will tell. In the meantime, employers should begin work now to identify any areas of concern with respect to pay disparities so that it can work to be in compliance with the law when it goes into effect next year.

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