General Overview of the MA Pay Equity Act
The Massachusetts Pay Equity Act went into effect on July 1, 2018.
This act was introduced in an effort to ensure equal pay among employees doing comparable work, specifically to close the wage gap among genders.
The two biggest changes from this act:
1. Employees who are doing comparable work must be paid equally.
2. No longer can you ask a candidate about their salary history.
Not only will this law affect recruiting practices and how potential candidates are addressed – but also will require that the current employee base of a company needs to be analyzed and examined to make sure those who are doing comparable work are being paid the same.
How it’s going to affect you:
This is going to change the way teams manage the recruitment and hiring process. There is class action potential and significant liability potential for employers. For hiring managers, they must abide by the legal requirements of paying someone fairly for comparable work, and for talent acquisition professionals they must understand how to talk about compensation with candidates during the screening process and avoid asking about their salary history and using salary as a means to screen someone out.
Recruiters are accustomed to being able ask candidates about their pay history and how much they’re currently making – this will no longer be allowed moving forward. There is a certain amount of lenience toward being able to ask what they might be looking for in a new position – but if they’re not willing to provide that information it’s best not to push it.
Employees are going to be free to ask co-workers what they’re earning. It will be very attainable for employees to find out if they're being compensated fairly. While, this doesn’t necessarily mean that there is some sort of intentional act on behalf of the employer to pay people differently - but, if someone feels they’re doing comparable work, and they’re not being paid fairly – they can act on it. And that could mean liquidating punitive damages including having to pay back salary - as well as legal fees for that employee.
Best Practices for Hiring Managers and Employers
For hiring mangers, examine how employees on your team are grouped with their job titles and the different responsibilities that fall under those titles. Use it as a starting point to understand who may be doing comparable work. While job titles alone won’t tell you the full picture if someone is doing comparable work, it is the first step to understanding what each person is responsible for in their role.
Examine if there is a merit system in place, or if their compensation is based off quality or quantity of their work. Differences in pay will require justifications.
Moving forward, take the salary range being offered for a job and put it in as tight of space as possible. Instead of 100k-150k, a tighter range of 120k-125k is more optimal. Determine the salary range based on value of the position to the organization prior to hiring process.
Best Practices for Recruiters
Anyone involved in the hiring process moving forward cannot ask about salary history for any candidates during the screening process – there are no exceptions.
If a candidate decides to be forthcoming and wants to provide salary history information – that is their choosing. But make sure that it’s documented, that it's information that they voluntarily offered. It is not information that you asked for.
You are permitted to ask "what salary amount are you looking for?" However, it is recommended to not push the issue if they do not feel comfortable providing that information.
Recruiters should be armed with the salary or salary range of the position and be permitted to discuss that salary openly with candidates.
6 Exceptions to Equal Pay Liabilities:
- Seniority: The employer has a system where employees are paid based off seniority. E.g. two employees may hold the same title - but one person may have several years more experience working under that title.
- Merit: There’s an outline of each person’s job and what the expectations are. Certain performance measurements are put into place. At the end of the year when there is a review - one employee might be rewarded for hitting their goals. And another person might not receive a raise because of shortcomings with goals.
- Measurements of quantity or quality: In sales for example, there is a measurement of the amount of sales that an employee makes – this being the quantity part. One person might make 20 sales over the course of the year, and someone else may make 5. In that case the person with the better performance is more likely to earn more pay.
- Geographic location: In regards to the state of MA, you may have one person working in one area where the cost of working is going to be more expensive than working another location. An employee may be doing the same job in Boston and there’s a certain expense tied to working in Boston compared to someone working in a more suburban location where cost isn’t going to be as great.
- Education – The education must be applicable for what the position is. If someone has a Masters in Business, but they’re working as a computer programmer that might not justify a difference in pay. But maybe a Master’s in Computer Science may result in one person being paid a little more versus another.
- Travel – This does not mean commute. It refers to if two people might have the same job but one as part of their job has to regularly travel perhaps to visit clients, whereas the other one doesn’t have the same travel requirement.
Where Else it is in Effect:
The majority of the states in the U.S. have some type of pay equity act in place. Some are further along than other. Some have certain aspects to it in process. Some of it may be limited to pay equity for gender- only applying to state or public positions.
Others are only honing in on private or certain sections. Some states have limitations toward asking about salaries others don’t - But the efforts are out there – and you can anticipate that this will evolve over time.
If you have any questions, we are available at any time to discuss. Talent Retriever is you full recruitment resource. Contact Us Here.