Many independent insurance agencies are small business employing local people. As small businesses focused on the day-to-day grind of producing business and servicing their clients, they may not keep up as much as they should on a changing legal landscape.
On July 1, 2018, Massachusetts employment law landscape will radically change when the Massachusetts Equal Pay Act (“MEPA”) comes into full force and effect. Agency Checklists published a detailed article on the law and its provisions when the Legislature enacted MEPA. See Agency Checklists’ article of August 8, 2016, “New Law Bars Gender-Based Pay Differences And Prohibits Salary History Questions.”
Lawyers see “inevitable lawsuits” against employers after MEPA takes effect July 1.
The Massachusetts Lawyers Weekly, a trade publication for Massachusetts lawyers, had an article in March about the new equal pay law that had the subtitle: “But lawsuits seem inevitable come July 1.” In that article, a Boston lawyer, Daniel S. Tarlow, a specialist in employment law and litigation, was quoted as saying regarding MEPA taking effect, “It’s hard for me to believe there won’t be an earthquake in Massachusetts [of litigation].” The reason Attorney Tarlow gave in the article for predicting such litigation was that “a lot of employers ‘have problems they don’t really even understand.’”
Intent to discriminate legally irrelevant and losing employer must pay double damages and legal fees
Why is the legal profession so interested in MEPA? Helping to advise their clients is one answer. Another answer is that employers violating MEPA, if successfully sued for having paid an employee less than an employee of a different gender for “comparable work” are liable for:
(1) the amount of the affected employee was underpaid;
(2) double damages equal to the amount of the wage underpayment; and
(3) the employee’s reasonable attorneys’ fees and other court costs.
MEPA does not require intent to discriminate in paying equal wages for liability to attach to an employer. If an employee shows gender-based underpayment for comparable work occurred, the employer’s intent is legally irrelevant.
Whether the prediction of a deluge of lawsuits under MEPA comes true or not, MEPA’s provisions do have the potential to cause major problems for any large or small insurance industry employer that treats this law with anything less than the utmost seriousness.
Law prohibits gender pay differences for comparable work
The basic provision of the MEPA effective July 1, 2018, is:
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.”
Ten points to give the gist of MEPA’s requirements
The following are ten points (the law has a lot more) from MEPA that insurance employers and employees should know:
- The MEPA covers employers in Massachusetts irrespective of size. There is no exemption for employers with less than fifty, twenty-five, ten, five or two employees.
- Under MEPA “comparable work” is work that requires substantially similar skill, effort, and responsibility, and is performed under similar working conditions.
- Under MEPA “wages” includes all forms of incentive pay, such as commissions, bonuses, profit-sharing, and other production incentives.
- Differences in wages between genders for “comparable work” is only allowed when based on a seniority system, a merit system, system based on earnings including quantity or quality of production, sales, or revenue; a job’s geographic location; education, training or experience required for the job; or regular required job travel.
- Employers may not prohibit employees from disclosing or discussing their wages with anyone.
- Employers may not seek the salary or wage history of any prospective employee before making an offer of employment that includes compensation, and may not require that a prospective employee’s wage or salary history meet certain criteria.
- If an employee telecommutes through an arrangement with his or her employer to a Massachusetts worksite, MEPA applies.
- Job titles do not necessarily matter for determining whether two jobs are “comparable” under MEPA. If the different job titles require the skill, effort, and responsibility required to perform the jobs they are comparable work and require equal pay.
- Paying an employee an extra bonus to make up for the fact that he or she has a lower base salary than other employees performing comparable work will not satisfy the employer’s obligations under MEPA.
- A pay system rewarding time of service with the employer cannot exclude spent on leave due to a pregnancy-related condition or legally protected parental, family or medical leave.
Attorney General Guidelines and website on MEPA
Beyond the few points about MEPA in this article, Attorney General Maura Healey has issued guidelines to ensure that employers are prepared to comply with MEPA when it takes effect on July 1, 2018.
The Attorney General has placed her guidelines and other compliance resources on a dedicated website: Massachusetts Equal Pay Law. This website has several resources as can be seen in the screenshot below. To access the website and its resources click on the screenshot.