The effective date of the new Massachusetts Equal Pay Act is fast approaching, and employers who have not yet begun to evaluate wage disparities between men and women need to start the process. Beginning July 1, 2018, the revised law will require that employees be paid equally for work involving similar skill, effort and responsibility. Analyzing existing pay disparities and making progress to address them will help shield employers from double the amounts of wage differences and other penalties under the Equal Pay Act.
The new Equal Pay Act revises an existing law that, due to court interpretation, has been effectively useless to address wage disparities. On July 1, that law will mandate that all workers be paid the same for “comparable” work regardless of gender and will bar companies from ordering their employees not to talk about their pay. Courts evaluating Equal Pay Act claims will ignore job titles and focus on whether jobs require “substantially similar skill, effort and responsibility” and are “performed under similar working conditions.” Penalties under the Act will be substantial and include the payment of employee legal fees but can be abated or avoided completely by self-evaluation and concrete action in advance of July 1, 2018. Implementation of the law was delayed two years from its passage in July 2016 to provide employers time to address pay disparities.
Employers who haven’t yet done so should move quickly to determine whether wage inequity exists. Doing this with the assistance of counsel, either in-house or from outside the company, should permit the initial findings of an Equal Pay Act audit to be kept confidential, and compensation specialists may be helpful in some cases. This makes sense given the existence of a federal law on equal pay that does not shield audits in the same way the new Massachusetts Equal Pay Act will. Once an initial audit is completed, employers and their attorneys should decide how to address the results and whether more audit work is needed. Under the Massachusetts Equal Pay Act, progress on abating unequal pay is required before the audit will be a useful defense to suit.