After nearly two years, the Equal Pay Act—signed into law in August of 2016—has gone into effect this July. The gender pay gap has been a hot-button issue for a number of years, but what does this new regulation mean for businesses? For employers and employees alike, here is everything you need to know about Massachusetts’ new equal pay law.
What’s New
You may be thinking, Wasn’t equal pay for men and women already a requirement? And you would be right, but with a few stipulations.
According to Michelle Roccia in an article with MassLive, the phrasing of the new law establishes precedent for enforcement of the law, while defining a few important terms: “comparable work”, “working conditions”, and “wages”.
Essential Terms
The following terms are specifically defined in the new Equal Pay Act:
Comparable Work
Comparable work is not determined solely by a similar or identical job title. The new law defines “comparable work” as any work that is completed with significantly similar skill, effort, or under similar conditions.
Working Conditions
The Equal Pay Act defines “working conditions” as the environment and circumstances typically considered when determining wages (i.e. shift differentials, potentially hazardous environments of a job, etc.).
Wages
Wages are defined as any money paid as compensation for employment.
For Employers
As an employer, it is important to note that this new law does not mandate that employees all be paid equally. The law does make allowances for disparities in payment based on the following conditions:
- Seniority systems (provided that seniority is not inhibited by parental leave, family and medical leave, or absence due to a pregnancy-related condition)
- Merit systems
- Systems in which earnings are determined by caliber of production, sales, and/or revenue
- Geographic location
- Relevant education, training, and experience
- Regular, necessary travel
If you are an employer and you find yourself out of compliance with this law, be aware that this poor payroll management could make you liable to compensate the employee for unpaid wages, as well as attorney fees in the event of a lawsuit.
However, liability can be avoided if your company completes a self-evaluation of your payroll system and can demonstrate that reasonable efforts have been made to close wage gaps based on gender for employees completing comparable work.
Just be aware that simply changing the salary of a highly-paid employee is not the cure-all for non-compliance. In fact, the law specifically prohibits lowering the wages of another employee for the sole purpose of regaining compliance. Use this payroll calculation tool to conduct these evaluations and take steps toward wage equality.
For Employees
As an employee, if you believe your rights under this law have been violated you have several options: you can contact the Attorney General’s Civil Rights Division by phone at (617) 963-2917 or you can file a complaint online. According to the Massachusetts Government website, investigations can take 18-22 months to complete and reports of gender-based wage discrimination must be filed within 3 years of the offense.
Operating a business is already challenging work, but understanding changes brought about by new legislation is vital for keeping your business above board and out of legal trouble. Make the informed choice: trust the certified payroll professionals at Commonwealth Payroll and HR for all of your payroll management needs. Call us today at 877-245-1159.
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