In Massachusetts, employers are now prevented from requesting salary history from job applicants.
The state is the first in the country to expressly prohibit employers from requesting prior pay information.
On August 1, the governor signed the Massachusetts Pay Equity Bill into law. It had previously passed unanimously in the Massachusetts legislature.
The Pay Equity Bill is one of a handful of bills that the Massachusetts governor requested be on his desk before the end of the current legislative session. Notably, it has been hailed as “compromise legislation,” endorsed by both labor groups and business associations.
Indeed, Richard Lord, President and CEO of Associated Industries of Massachusetts (AIM) – whose organization worked on the compromise bill – expressed gratitude that the legislation “ensures fair compensation for all workers while allowing employers to attract and retain skilled employees.”
So how will the bill affect employers in the Bay State?
Some positives for employers
The Massachusetts Pay Equity Bill prohibits pay discrimination based on gender for comparable work. It's helpful that the bill establishes a number of valid reasons - or “mitigating factors” - for pay disparity among employees:
A system that measures earnings by quantity or quality of production, sales, or revenue
Geographic location where job duties are performed
Education, training or experience to the extent such factors are reasonably related to the particular job in question
Travel, if the travel is a regular and necessary condition of the particular job
As mentioned, employers can no longer request salary history when hiring (although job applicants are not prevented from voluntarily providing that information).
Instead, hiring managers must state a compensation figure upfront — based on what an applicant’s worth is to the company, rather than on prior pay figures.
Also good for employers: In the event of a pay discrimination claim, the bill allows employers to use a self-evaluation as an affirmative defense, as long as the evaluation was conducted within the previous three years and can show reasonable progress toward correcting pay differentials.
Some restrictions on employers
There are additional provisions included in the bill that should be of particular interest to business owners. Employers cannot do the following:
Reduce an employee's pay to comply with the law
Provide a current or former employee's salary information to a prospective employer
Restrict employees from sharing pay information
Take disciplinary action against an employee for sharing pay information, complaining about pay, or involvement in pursuing action regarding pay disparity for themselves or others
Disclose an employee's wage information (unless required under the law or with written consent from the employee)
The Massachusetts Pay Equity Bill will take effect July 1, 2018.