The Massachusetts Attorney General Issues Guidance on Sweeping Changes to the Massachusetts Equal Pay Act

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In advance of the July 1, 2018 implementation of extensive amendments to the Massachusetts Equal Pay Act (“MEPA”), the Attorney General (“AG”) issued its Guidance on March 1, 2018. While the Guidance does not have regulatory effect, the state’s highest court, the Supreme Judicial Court, has generally afforded substantial deference to such statutory interpretations by enforcing authorities. Massachusetts was the first state in the country to pass an equal pay law and the 2018 amendments make MEPA one of the strongest pay equity laws in the country, intended to close the 84.3.% pay gap for working women in Massachusetts.

MEPA OVERVIEW

MEPA prohibits employers from paying different wages to employees of different genders who perform comparable work, unless variations are based on one or more of six statutory factors. MEPA defines “comparable work” as work that requires substantially similar skill, effort, and responsibility, and is performed under similar working conditions. An employer may not determine comparability based on job titles alone. Wages are defined as “all forms of remuneration for employment.”

MEPA also imposes three additional restrictions on employers. First, employers generally may not seek salary or wage history from prospective employees. Second, employers generally may not prohibit employees from discussing their pay or that of co-worker. Third, employers may not retaliate against any employee for an exercise of rights under MEPA. Further, salary history is not a defense to liability. Nor is intent to discriminate based on gender required to establish liability.

MEPA covers nearly all Massachusetts public and private employees and those with a primary place of work in the Commonwealth.

GUIDANCE HIGHLIGHTS

The Guidance sets forth and further defines the key terms for determining “comparable work” as follows:

  • “Skill” includes “such factors as experience, training, education, and ability required to perform the jobs.”
  • “Effort” is described as “the amount of physical or mental exertion needed to perform a job.”
  • “Responsibility” is explained as encompassing “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.”
  • “Working conditions” mean “environmental and other similar circumstances customarily taken into account in setting salary or wages.” These can include physical surroundings and hazards. Working conditions may include the day or time of work, such as the types of scheduling differences that are taken into account in establishing shift differentials.

The Guidance defines that “substantially similar” means that skill, effort, and responsibility “are alike to a great or significant extent, but are not necessarily identical or alike in all respects.”

The Guidance sets forth and further explains the six statutory factors that employers may use to explain wage differentials between employees of different genders who perform comparable work:

  1. a seniority system;
  2. a merit system;
  3. a system which measures earnings by quantity or quality of production, sales, or revenue;
  4. the geographic location in which a job is performed;
  5. education, training or experience to the extent those factors are reasonably related to the job; or
  6. travel, if the travel is a regular and necessary condition of the job.

The Guidance explains MEPA’s statutory Affirmative Defense for “Good Faith” Self-Evaluation. A “complete defense” exists for employers have, within three years of a claim, conducted a legally sufficient self-audit of their pay practices, provided that the self-audit is reasonable in detail and scope, and the employer establishes that it has made reasonable progress towards eliminating any prescribed gender-based wage variations discovered in the audit. Even deficient self-audits done in good faith can prevent liability for double damages, but will not provide a complete defense to MEPA.

The Guidance explains that whether an evaluation is “reasonable in detail and scope” depends on the “size and complexity of an employer’s workforce,” in light of factors including “whether the evaluation includes a reasonable number of jobs and employees,” and is “reasonably sophisticated.” If disparities are not yet eliminated, the employer must show that they will be “in a reasonable amount of time.”

The Guidance includes resources for employers in appendices including 1) a guide for conducting self-evaluations, 2) a pay calculation tool, and 3) a checklist to consult when assessing whether existing policies and practices comply with MEPA. Employers should consult with counsel before conducting any self-evaluation which may be discoverable in litigation or in government investigations.

The Guidance can be found at:

https://www.mass.gov/files/…/03/…/AGO%20Equal%20Pay%20Act%20Guidance.pdf

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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