NEW GUIDANCE ON THE MA EQUAL PAY ACT Some Answers, and a lot of - PowerPoint PPT Presentation

NEW GUIDANCE ON THE MA EQUAL PAY ACT Some Answers, and a lot of Questions Presented by: Cheryl Pinarchick and Monica Snyder Phone: (617) 722-0044 cpinarchick@fisherphillips.com mpsnyder@fisherphillips.com fisherphillips.com

Our Goals  Review the Massachusetts Pay Equity Law  Parse the recent guidance released by the MA Attorney General’s Office  Discuss steps you can take to achieve pay equity and mitigate your legal risk fisherphillips.com

Massachusetts Pay Equity Law (MEPA) “No employer shall discriminate in any way on the basis of gender in the payment of wages, or pay any person in its employ a salary or wage rate less than the rates paid to its employees of a different gender for comparable work…” fisherphillips.com

Massachusetts Pay Equity Law (MEPA)  Effective July 1, 2018  Effort to try to eliminate the “pay gap”  Generally, requires men and women to be paid the same for comparable work – not as simple as it sounds  Strict liability – no showing of intent necessary  Expressly permits class action lawsuits  Employers can be liable for double damages and attorneys’ fees  Extends 1 year statute of limitations to 3 years fisherphillips.com

The Guidance  Issued March 1, 2018 by the Attorney General’s Office  Overview of the law, answers to Frequently Asked Questions and tools to assist employers with conducting a self-evaluation/self-audit  Not regulations and do not carry the force of the law (meaning a court could interpret MEPA differently)  The Attorney General is charged with enforcing MEPA and authorized to bring suit on behalf of employees whose employers fail to comply with the law  The guidance describes how the Attorney General’s Office is interpreting the law for enforcement purposes. fisherphillips.com

Who is covered?  All employers in Massachusetts (except the federal government)  Any employer outside Massachusetts with employees whose “primary place of work” is in Massachusetts  Any employee with a “primary place of work” in Massachusetts, even if the employee lives outside Massachusetts  Includes full-time, part-time, seasonal, per-diem and temporary employees fisherphillips.com

Who is covered?  “Primary place of work” for “most” employees is defined as the “location where they do most of their work for the employer.”  Employee who spends work hours traveling outside Massachusetts but regularly returns to Massachusetts “base of operations” before resuming a new travel schedule  Employee who telecommutes to a “Massachusetts worksite”  Employee who permanently relocates to Massachusetts  Not necessary for an employee to spend 50% of the employee’s working time in Massachusetts for it to be the “primary place of work” fisherphillips.com

What is “Comparable Work”?  Work that requires substantially similar:  Skill, effort and responsibility  And is performed under similar working conditions  “Substantially similar” means all of these factors must be “alike to great or significant extent, but are not necessarily identical or alike in all respects” fisherphillips.com

What is “Comparable Work”?  Employers cannot rely on job titles or descriptions alone  Job descriptions that take into account skill, responsibility, effort and physical conditions may be helpful in determining which jobs are comparable  Examples strongly suggest employees working in different departments or business units could be performing comparable work, even if they have different job titles fisherphillips.com

Skill  Includes factors such as experience, training, education and ability to perform the job in question  Measured in terms of the requirements of the job, not the skills an employee happens to have  Skills not necessary to perform a particular job are not relevant fisherphillips.com

Effort  Amount of physical or mental exertion needed to perform a job  Job factors which cause mental fatigue and stress and those which “alleviate fatigue” should be taken into account  Encompasses the requirements of the job as a whole fisherphillips.com

Responsibility  Encompasses the degree of discretion or accountability involved in performing the essential functions of the job and the duties regularly required to be performed for the job  Includes the amount of supervision the employee receives, whether the employee supervises others, and the degree to which the employee is involved in decision-making, such as determining policies or procedures, purchases, investments, etc.  Minor or occasional differences in responsibilities will not prevent certain jobs from being comparable fisherphillips.com

Working conditions  Environmental and “other similar circumstances customarily taken into consideration in setting salary or wages”  Includes the physical surroundings such as temperature and noise  Includes hazards encountered by employees performing the job, such as exposure to chemicals or fumes, electricity, heights, dangerous equipment  Intensity, frequency and risk of injury  Includes meaningful shift differentials (i.e., overnight shifts versus day shifts) fisherphillips.com

What is included in “wages”?  Broadly defined  Includes all forms of remuneration - commissions, bonuses, profit sharing, deferred compensation, paid time off, expense accounts, car and gas allowances, retirement plans, insurance, and other benefits fisherphillips.com

What is included in “wages”?  The following are excluded from calculating wages using the Attorney General’s Pay Calculation Tool:  Commissions, but the Instructions to the Tool provide that employers who pay commissions should ensure that they calculate commissions based on the same formula for all employees performing comparable work  Benefits plans, but employers should ensure that all employees performing comparable work have the same opportunity to participate on the same terms fisherphillips.com

What are lawful justifications for pay disparities?  System rewarding seniority, provided seniority is not reduced due to pregnancy or protected parental, family, or medical leave;  Merit system ;  System measuring earnings by quantity or quality of production, sales, or revenue;  Education, training, or experience, to the extent reasonably related to the position;  Geographic location in which a job is performed; or  Travel, if regular and necessary for the business. fisherphillips.com

What is a “system”?  Plan, policy or practice that is:  Predetermined or predefined;  Used by managers or others to make compensation decisions; AND  Applied in good faith without regard to gender. fisherphillips.com

Seniority system  System that compensates employees based on length of service  Time off for “parental, family and medical leave” must still be included for seniority purposes.  Only “leave protected by statute” counts as “parental, family and medical leave”  Examples: FMLA, Small Necessities Leave Act, Pregnant Workers Fairness Act, and Domestic Violence Leave Act  Question: whether this includes leave taken as a reasonable accommodation under disability discrimination laws or earned sick time? fisherphillips.com

Merit system  System that provides for variations in pay based upon employee performance as measured through legitimate, job- related criteria  Guidance suggests that a merit system should:  Be written  Measure performance on a set scale  Be taken into account in setting a portion of the employee’s compensation the next year fisherphillips.com

System which measures earnings by quantity or quality of production, sales, or revenue  System that provides for variations in pay based upon the quantity or quality of an employee’s individual production or sales or other revenue generation in a uniform, reasonably objective way  Includes piece-rate pay, commissions, and other revenue- based incentives fisherphillips.com

Geographic location  May be used to justify pay variations when the locations correspond with different costs of living or differences in relevant labor market from one geographic location to another  No insight about what qualifies as a “location” or “labor market”  Changes within a particular labor market and market forces alone are not valid justifications for pay variations  Highlights the importance of benchmarking by location fisherphillips.com

Education, training, or experience  Valid justifications for pay variation only if reasonably related to the particular job in question  A “reasonable employer” would conclude that the education, training, or experience “would help the employee to perform the particular job in a more efficient or more effective manner”  Suggests that the determination must have been made at time the employee’s wages or salary were determined fisherphillips.com

Travel  Must be “a regular and necessary condition of the employee’s job”  Travel is not considered “necessary” because a person prefers or chooses to travel when alternatives are available  Regular commuting to or from a work location does not qualify as “travel” for purposes of this statute fisherphillips.com