New Pay Equity Act On the Horizon

Equal pay has been a hot topic throughout the country in recent years. Although The Equal Pay Act of 1963 prohibits an employer from discriminating on the basis of sex in the payment of wages to employees, the federal law only goes so far. Many states including Massachusetts, California, Maryland and Philadelphia have proposed legislation to address this issue.  Many more states are expected to follow their lead.

In Massachusetts the new law is scheduled to take effect on July 1, 2018. It will make it unlawful for employers to pay  men and women different rates for “comparable work”. The law will also prohibit employers from screening job candidates based on their previous salary or asking salary-related questions until after an offer is made.

Additionally, employers won’t be able to contact an applicant’s former company to confirm the wage amount until after an offer is made, even then, employers will only be able to verify past wage amounts if they have written permission from the applicant.  This creates challenges for companies when interviewing candidates and negotiating offers. As a result, employers will need to update their job applications and recruitment policies.

Once employees are hired, employers cannot ask them to refrain from discussing with one another what the employer pays them. The National Labor Relations Act (NLRA) gives all nonsupervisory employees, union or nonunion, the right to discuss their pay with one another. An employer cannot lawfully tell those employees or imply in a policy that pay is private or otherwise discourage employees from discussing their pay with one another.  The act also bars employers from retaliating against employees for exercising their rights under the act.

Companies should take a good look at internal pay practices and review what factors drive salary increases and promotions. It is also recommended to conduct an internal audit well before the law takes effect.

Questions? Contact Mullin HR Group, LLC to ensure compliance with the new law.

Posted in HR Trends