Tufts Health Plan discusses the Massachusetts Equal Pay Act and the importance of evaluating internal pay practices.
Across the nation, the gender pay gap remains a stubborn and major challenge. On average, women make 80 cents for every dollar a man earns, according to the American Association of University Women. Even worse, if a woman is a mother or a woman of color, those numbers drop even further – all the way down to 61 cents for African American women and 53 cents for Latina women.
In Massachusetts, women do somewhat better, making a slightly higher 83 cents for every dollar men earn. Still, averaged out to a year’s pay it is a significant, damaging disparity.
Studies show these figures are consistent regardless of industry, education level and within most companies.
The good news is that Massachusetts has taken steps to address this inequity with new legislation – The Massachusetts Equal Pay Act (MEPA) – that went into effect on July 1, 2018.
The Massachusetts Equal Pay Act (MEPA)
MEPA works to close the gender pay gap in the Commonwealth and includes a number of important provisions. Enacted last July, it states that employers cannot discriminate against employees because of their gender when it comes to setting and paying wages for comparable work. MEPA defines comparable work as similar skills including experience, training and education, physical and/or mental effort needed to perform a job, responsibility - the amount of supervision needed - and working conditions such as shift differentials and hazards.
The law also says employers cannot prohibit employees from discussing wages with one another. In addition, employers can no longer seek the salary or wage history of prospective employees before making an offer that includes compensation. And they can’t require that a prospective employee’s wage or salary history meet certain criteria.
Finally, employers cannot retaliate against employees who exercise these rights under the law. An employer who violates MEPA can be held liable for twice the amount of the unpaid wages, plus attorney fees and costs.
As leaders of Massachusetts’ business community, it’s important that companies and organizations understand this law so that they can implement hiring best practices.
Becoming a Pay Equity Leader
Pay equity is the right thing to do, but that doesn’t mean it can’t be challenging at times. Even though a wage or salary figure is clear, determining the right number can become more complicated when factoring in experience and performance.
Fortunately, MEPA does allow for differences in pay when salaries are based on concrete factors like seniority, a merit system, the education, training or experience an employee has, the amount of travel an employee does, and the geographic location where a job is performed.
The new law creates specific guidelines and forces organizations to be very conscious about salary and wage decisions. So what can companies do to not only comply with the law, but become leaders on this issue?
It helps if employers view decisions about pay through a pay equity lens, and take a thorough and thoughtful approach to salary and wages.
More specifically, consider conducting internal company or organizational pay equity reviews. Even prior to the new law, Tufts Health Plan conducted its own pay equity reviews with the help of outside counsel and internal legal and compliance departments every three years. We reviewed every employee and considered their experience, tenure and performance, in addition to their detailed job and pay history. In 2015 we found no gender disparities. When we conducted the next review in 2018 using guidelines from MEPA, our organization still scored well overall. This time though, as highlighted in The Boston Globe, we discovered seven instances where pay adjustments were warranted, and we made them.
Evaluating internal pay practices is more crucial now than ever before. MEPA provides a defense for any employer that has conducted a good faith self-evaluation of wage practices within three years of a MEPA complaint being filed as well as can show reasonable progress toward eliminating any unlawful gender-based wage differentials that the self-evaluation revealed.
It’s also helpful to benchmark roles within an organization and compare those to others in the industry and geography – particularly with companies competing for the same talent. Identify benchmark median salaries, and know where an individual falls on that scale.
Just as important, make sure to review compensation guidelines and conduct future pay analyses annually. Finally, make sure to communicate and educate supervisors and managers about wage and salary policies and best practices, and work with HR on all pay decisions. Trainings are available to companies who want to better understand the MEPA law. At Tufts Health Plan, for example, we required all of our managers to complete a computer-based training on the law.
While the passage of MEPA was an important milestone, it is the Greater Boston business community that is helping to put these policies into action. Together we are helping Massachusetts cement its status as a national pay equity leader.