Preparing For The New Massachusetts Equal Pay Law, Part I: Whether, When, And How To Conduct A Pay Equity Audit

Author:Ms Diane Saunders
Profession:Ogletree, Deakins, Nash, Smoak & Stewart
 
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The July 1, 2018, implementation date for the amendments to the Massachusetts Equal Pay Act (MEPA) is less than a year away. The amendments approved in 2016 will bring about substantial changes to the definition of "comparable work," employer defenses, statutes of limitations, and prohibited employer practices, such as salary history inquiries. The main reason for the delay in the implementation date of the new law was to give Massachusetts employers a chance to conduct the pay audits contemplated by the new law. The new law provides a two-tiered safe harbor for employers that conduct pay audits. Although the Massachusetts Attorney General's Office has not yet issued regulations or any other guidance relating to the amendments, Massachusetts employers need not wait for the attorney general's office to conduct a MEPA pay audit. As explained below, a pay audit may provide your company with valuable protection in the event that a pay differential exists and a pay discrimination claim is filed under state law.

MEPA's Two-Tiered Safe Harbor Scheme for Pay Audits

MEPA's new two-tiered safe harbor scheme for employers that conduct pay audits is as follows:

Tier 1 provides a complete affirmative defense to claims under both MEPA and Massachusetts General Laws Chapter 151B, the state's anti-discrimination statute, for employers that have both completed a pay audit in good faith and can demonstrate that "reasonable progress" has been made towards eliminating wage differentials.

Tier 2 provides relief from liability for liquidated damages under MEPA for employers that have conducted a pay audit in good faith and can demonstrate that "reasonable progress has been made" towards eliminating pay differentials but cannot demonstrate that the audit was "reasonable in detail and scope."

The new law provides that an audit "may be of the employer's own design, so long as it is reasonable in detail and scope in light of the size of the employer, or may be consistent with standard templates or forms issued by the attorney general." As discussed above, the attorney general's office has not yet issued any guidance on the new law or on what constitutes an acceptable pay audit.

Pursuant to the new law, employers that do not conduct a pay audit will not be penalized in their defense of state law claims as the new law specifically provides that an "employer who has not completed a self-evaluation shall not be subject to any negative or adverse inference as a result of not having...

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