Pedro Fernandez on July 19, 2018
How the Massachusetts Pay Equity Act Can Impact Employers
Pay equity has recently been a hot topic of discussion. Even though multiple laws have already been put into place to narrow the pay gap between men and women, many would argue that progress has been only marginal. The upcoming Massachusetts Pay Equity Act is designed to remedy this issue and promote equal opportunities.
This new law will officially go into effect on July 1, 2018, for Massachusetts Commonwealth employers and employees. The main purpose is to level the playing field in terms of salary for all workers within the state and give equal opportunities for both genders to earn a competitive salary.
In a governor’s office press release, Massachusetts governor Charlie Baker said, “I am pleased to sign bipartisan legislation to create a more level playing field in the Commonwealth and ensure that everyone has the opportunity to earn a competitive salary for comparable work.”
This new law involves two key changes. First, it mandates that Massachusetts-based employers remove salary inquiries from their job applications. Second, employers will be prohibited from screening candidates based on what they earned at a previous job or asking questions regarding salary until they’ve made a formal job offer.
In addition, employers won’t be permitted to contact a candidate’s prior company to confirm the wage until after an offer is made and they have received written permission from the applicant.
This ensures that employers make an offer based on a candidate’s skills and expertise. That way employees are more likely to be compensated fairly regardless of their gender.
How to Prepare Your Business
With the new law’s enactment just around the corner, it’s critical that Massachusetts companies prepare themselves. A great starting point is to perform a self-audit to determine whether or not your current policies regarding salary negotiation comply with this law. If not, you’ll need to modify them right away.
For instance, if your current application asks employees what their previous salary was, that section should be eliminated. If you’ve been directly discussing prior salary during job interviews, that must be omitted.
Mark Burak, an attorney with Ogletree Deakins in Boston also explains, “Employers need to understand what it is that drives pay divisions in their companies and why there may be pay disparities. They shouldn’t just assume that the reason is gender bias.” He also states, “Companies should take a good look at internal practices and make sure they are using good data. How is starting pay set, and what factors drive increases and promotions?”
The Massachusetts Pay Equity Act results in a significant change to the hiring process as it relates to negotiating salary. If this applies to your business, familiarize yourself with the changes and ensure that you’re up to speed by July 1. For a complete overview of this new law, check out the Massachusetts Legislature.