On Monday, August 1, 2016, Massachusetts Governor Baker signed the Act to Establish Pay Equity (“Pay Equity Act”) which will become effective July 1, 2018. Below are the big takeaways for employers:

Equal Pay for “Comparable Work”

The Act makes it unlawful for employers to discriminate on the basis of gender in the payment of wages or salary for “comparable work.” Whether two employees’ work is “comparable” cannot be determined from job titles or descriptions alone, but requires a case-specific analysis of whether the work in each job requires substantially similar skill, effort and responsibility, and is performed under similar working conditions.

Specified Exceptions

The Act permits discrepancies in wages that are legitimately based on (1) seniority; (2) merit; (3) quantity or quality of production or sales; (4) the geographic location in which a job is performed; (5) education, training or experience (to the extent such factors are reasonably related to the particular job in question and consistent with business necessity); or (6) travel, if the travel is a regular and necessary condition of the particular job. But the Act expressly prohibits discrepancies based on time spent on leave due to a pregnancy-related condition or protected parental, family and medical leave.

Other Prohibited Conduct

The Act makes it unlawful for employers to: (1) prohibit employees from inquiring or disclosing information about their own or other employees’ wages; (2) screen job applicants based on their wage history; (3) seek the salary history of any prospective employee from a former employer; or (4) retaliate against and/or discharge any employee for opposing any unlawful practice under the Act or assisting in an investigation regarding the same. The Act also prohibits employers from reducing the salary of a higher-paid employee to achieve pay equity under the Act.

Enforcement

The Act establishes a three-year statute of limitation for claims. Employees aggrieved under the Act need not file a complaint with the Massachusetts Commission Against Discrimination before suing in court. An action to recover under the Act may be brought by one or more employees on behalf of themselves and other similarly situated employees. Employers found in violation of the Act will be liable for twice the amount of the employee’s underpaid wages (once as back pay and once as “liquidated damages”), including benefits or other compensation, as well as attorneys’ fees and costs.

Employer’s Good-Faith “Self-Evaluation”

An employer may defeat a claim under the Act by presenting evidence that it has completed a good faith “self-evaluation” of its pay practices within the past three years and that reasonable progress has been made towards eliminating compensation differentials based on gender. Evidence of the self-evaluation or remedial actions taken in accordance with the Act cannot be used as evidence of a violation of the Act.

Immediate Takeaways for Employers

If you have not already conducted a self-evaluation of your pay practices, it may be advisable to do so before the law becomes effective on July 1, 2018. For questions about the Pay Equity Act and conducting an equal-pay self-evaluation, contact Gwen Nolan King.