Following weeks of piecemeal changes and updates, the Department of Family and Medical Leave (“DFML”) has now issued the final regulations (effective July 1, 2019). Click here for a revised Bello / Welsh alert, which has been updated to be consistent with both the final regulations and the bill passed last week. The most significant changes are as follows: Read more
Bello Welsh partner, Ken Bello, was quoted in an article about the new Massachusetts Pay Equity Law. The article is posted on Law360, here, and below with permission:
How Mass. Employers Should Prep For New Pay Equity Law
By Brian Amaral
Law360, Boston (August 11, 2016, 4:40 PM ET) — Massachusetts’ sweeping new law against gender pay inequality doesn’t go into effect for another two years, but employment attorneys in the Bay State are already preparing for a new regulatory regime that experts say will likely result in broad revisions to hiring policies and an increase in lawsuits.
The Act to Establish Pay Equity, passed by a Democratic Legislature and signed on Aug. 1 by the state’s moderate Republican governor, takes aim at a stubborn pay gap: Women make up nearly half the workers in the commonwealth but earn only 82 percent of what men do, according to the Massachusetts Equal Pay Coalition, which includes the Massachusetts chapter of the National Organization for Women and the Women’s Bar Association, among other groups.
The law broadens the definition of comparable work, narrows the acceptable reasons for pay disparities and explicitly permits class action suits. It also provides employers incentives to review their own policies, giving them an affirmative defense against claims of pay disparities by showing they’ve done a good-faith self-evaluation to understand and reasonably remedy gender pay gaps.
Along with a first-of-its-kind provision that prevents employers from asking prospective job candidates about their salary history, the new law is perhaps the most aggressive state law aimed at battling gender pay inequality in the nation, experts say.
Businesses have plenty of time to prepare: The law doesn’t go into effect until July 2018. But experts say it will have an immediate effect as employers start to prepare for its implementation, whether that happens through guidance from the attorney general or a trickle of court decisions.
“There’s going to be a lot of time for employers to decide, ‘Let’s look at our own pay practices,’” said Nina Kimball of Kimball Brousseau LLP, a plaintiff-side employment attorney who helped draft the law. “’Let’s see if we can take some proactive steps to change things.’”
Here are six things experts in the field say employment attorneys should do as the act goes into effect.
Ditch the Questions About Past Salaries
When the pay-equity law goes into effect in July 2018, Massachusetts will become the first state to outright ban employers from asking job candidates about their salary history. So some employers will have to change old habits, tear up job application forms and adjust their websites accordingly.
“This is a totally new type of tool that can help end the wage gap,” said Kimball. “If you’ve got prior discrimination in wages, asking about your salary history can bring it into your new job.”
Workers will still be allowed to volunteer that information, and employers will still be able to ask how much a potential employee is looking for, but that’s the extent of the wiggle room: When the law goes into effect, employers will have to stop asking.
Laurie Rubin, an employment attorney for Prince Lobel & Tye LLP, said it might be a good idea for employers to ditch the salary-ask question right away, even though it’s not banned for another two years. If employees after 2018 have a pay gap as a result of the practice of asking for salaries, the employers will be in noncompliance, Rubin said.
“They need to stop, I would say now, basing wages based on prior earnings,” Rubin said. “It’s only going to become a problem down the road.”
Take a Hard Look — And a Deep Breath
Another thing employers will have to start thinking about soon is the new affirmative defense in the bill. If faced with a pay-disparity or discrimination suit, an employer’s best shot might be to argue at the summary judgment stage that it has reviewed its salary practices in good faith and taken steps to address disparities.
If an employer has made a good-faith self-evaluation and can show reasonable progress toward eliminating gender-based wage differentials for comparable work, it can use that as an affirmative defense for three years.
“I do believe that will be a key element for employers to implement,” said Kenneth Bello of Bello Welsh LLP, who represents employers. “However, I would not be rushing to do that at this juncture. I would first be looking at, and thinking through, what should the elements of that self-evaluation be?”
Bello’s advice before diving into a study: Tread lightly.
“My first advice to clients has been and remains, ‘Take a deep breath,’” Bello said. “The law does not take effect until July 1, 2018. This provides a substantial amount of time for a company to think through and prepare for, first, how best to comply with the law, and second, to be able to defend itself in the event of a challenge.”
Attorney General Maura Healey, a vocal backer of the law, has been tasked with developing regulations on what those reviews will look like.
“The spirit of the new law requires that employers take a long, hard look at what is really going on in the workplace to uncover any gender issues that may exist, and to take affirmative steps to effectuate positive change,” said Lori Jodoin, the immediate past president of the Massachusetts Employment Lawyers Association and an attorney with plaintiff-side firm Rodgers Powers & Schwartz LLP. Rubin, of Prince Lobel, said that employers might want to consider conducting a pay disparity study with counsel to allow attorney-client privilege to shield the study from forced disclosure.
Lift Rules on Salary Secrecy
Under the law, employers will also not be able to prevent their employees from discussing their own salaries among each other, or asking one another how much they make. An employee can decline to reveal that information, and companies won’t be forced to reveal it.
But being able to ask is an important step to increase transparency, experts say. The new provision follows a trend around the country.
“Increasing pay transparency may help unearth more pay disparities in the workplace,” said Jodoin. “The revised statute encourages people to talk openly about what they earn, to consider whether their workplace is fair and equal, and to take affirmative steps to address inequality without fear of retaliation.”
Get Ready for More Lawsuits
Many bills passed by the Massachusetts Legislature prompt false predictions of an increase in lawsuits, said Bello of Bello Welsh. This one is different.
The law has several built-in incentives to encourage lawsuits, one of which is an explicit provision allowing class action lawsuits. The law allows for double damages and recovery of attorneys’ fees for the successful party.
It also extends the statute of limitations from one year to three years, and makes explicit that each paycheck that is unlawfully unequal is a new act of discrimination, rather than just the act of first setting the salary.
“I believe that come 2018 and beyond, there will be substantial litigation around multiple aspects of this law,” Bello said, adding: “Litigation of these cases will be enormously expensive as it will be factually intense, and the more fact-intensive a case is, the more difficult it is for an employer to get summary judgment.”
Except for the affirmative defense mentioned above, the cases probably won’t be resolved on summary judgment.
He added: “I do not know any attorney — management- or employee-oriented — who disagrees with the concept or the goal of the pay equity law. The issue is not the concept, but the means to achieve this goal. The pay equity law has incredible uncertainty in terms of its ultimate scope, and the costs of defending likely litigation will be enormous.”
Kimball, of Kimball & Brousseau, said: “I absolutely do believe that it will be used more, but I think it can also be used by employers to be proactive about instituting practices that are themselves going to help.”
Get Familiar With ‘Comparable’ Work
If it does come, the wave of litigation is still a few years away, leaving enough time to get familiar with what the law means by “comparable” work. Court decisions and policy guidance from the attorney general should help decide some of the operative terms.
Employers and attorneys should brush up on what the law says right away. The new law says that absent some exceptions, employers can’t pay any person less than employees of a different gender for comparable work, which is defined as “substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions.”
Massachusetts has long barred employers from paying women less than men for comparable work — indeed, in the mid-1940s, it became the first state in the nation to pass a gender pay equality law, advocates say. But the way that case law had shaped the old statute, the law required courts to look first at whether two jobs shared “important common characteristics” before even answering whether it required a substantially similar skill, effort and responsibility, said Rubin of Prince Lobel.
The new law “uses a broader view,” Rubin said. “It rejects the earlier interpretation, which also required you to look at content. It’s sort of rejecting that approach and taking a broader approach.”
Bello is advising clients to do a related or even separate review of their practices beyond just the affirmative defense that the law allows for. “All of this starts with a review and analysis of what a company’s current compensation picture looks like now, particularly for positions that have the same title or substantially perform the same functions, even if they have different titles,” said Bello. “Ultimately, companies will be well-served by having documentation clearly reflecting why a compensation decision was made. When and if there was a challenge, an employer can say, ‘You want to know why Mary got more than Bob or Bob got more than Mary? Here is the memo.’”
But Bello added a note of caution: “That said, documentation can either be your best friend or your worst enemy. If it’s done well — and accurately — it’s extraordinarily helpful. If it’s done poorly, then it is more harmful than no documentation.”
And Forget ‘Any Other Factor’
While federal law allows employers to vary salaries based on “any other factor” besides gender, this one does not.
Employers are given explicit ways to vary salaries, narrowed to just six factors: seniority — without taking into account pregnancy or other family leave; a merit system; a system that measures quantity or quality of production, sales or revenue; the geographic
On July 23, Massachusetts lawmakers unanimously approved An Act to Establish Pay Equity (the “Bill”), which seeks to ensure that men and women are paid equally for comparable work. Variations in pay must be based on legitimate reasons, as enumerated in the Bill. If Governor Baker signs the Bill into law, which he is expected to do, it will be effective in 2018, on either January or July 1.
Importantly under the Bill, an employer that has both completed a good faith, self-evaluation of its pay practices and can demonstrate that reasonable progress has been made towards eliminating compensation differentials based on gender for comparable work in accordance with that evaluation shall have an affirmative defense against claims. The self-evaluation, which shall not be admissible in any proceeding as evidence of a violation that occurred prior to the date the self-evaluation was completed or within six months thereafter, may be of the employer’s own design.
We will be working with clients on how to develop a “best practices” self-evaluation. This is new and uncharted waters for Massachusetts employers, and how best to design and implement a self-evaluation needs to be carefully considered and effectively implemented. As there is substantial time for this to occur, we do not recommend that employers rush to do the self-evaluation, but instead to take the time first to develop “plan of action” of how best to evaluate current pay structures generally and how those structures are applied to employees, and then to determine what is the best form and scope of a self-evaluation. We also recommend that this be done with legal counsel, not only in order to get appropriate legal advice and counsel, but also to be able to do so in a manner that is subject to the attorney-client privilege.
Over the coming weeks and months, we will be developing our own suggested best practices and working with clients as they proceed down this path.
In the meantime, we invite our clients to call any of our attorneys with any questions about this new law.
President Obama signed the “Defend Trade Secrets Act of 2016” into law on May 11th. The Act amends the Economic Espionage Act of 1996 to provide a federal private right of action for trade secret misappropriation and theft. Remedies include actual damages, injunctive relief, and exemplary damages and attorneys’ fees for willful and malicious misappropriation. The Act does not preempt state law, meaning that plaintiffs will now have the option of proceeding under either state or federal law when faced with a threat to trade secrets.
The Act also provides immunity for certain disclosures made to government officials or attorneys. Specifically, the Act provides that an individual may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (1) in confidence to a government official or an attorney, solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other filing in a lawsuit or other proceeding, if such filing is made under seal. Likewise, an employee who files a retaliation lawsuit for reporting a suspected violation of law may disclose the trade secret to his or her attorney and may use the trade secret information in a court proceeding if the individual files any document containing trade secret information under seal and does not disclose the trade secret except pursuant to court order.
Importantly, effective May 11, 2016, the Act requires employers to provide notice of this immunity in any contract or agreement with an employee that governs the use of trade secrets or other confidential information. Employers who fail to provide the required notification cannot recover attorneys’ fees or exemplary damages under the Act. The notice of immunity can be done in one of two ways. One way is to incorporate fully the notice of immunity into confidentiality agreements. The second way is to put the notice of immunity in the company’s policy for reporting a suspected violation of law, and then to cross-reference that policy in confidentiality agreements. For simplicity, we recommend that employers reproduce the statutory language in the notice of immunity.
Last November, voters approved a ballot initiative granting earned sick leave to Massachusetts employees. As we wrote in an earlier article, beginning on July 1, 2015, employees working in Massachusetts are entitled to earn up to forty hours of paid sick leave per calendar year. Employers with ten or fewer employees are not required to pay employees during this leave but must provide unpaid leave to their employees.
On April 27, 2015, the Massachusetts Attorney General’s Office released long-awaited proposed regulations, which we described here. After receiving many comments, both written and in the course of the six public hearings conducted across the Commonwealth, on June 19 the AGO issued final regulations implementing the Massachusetts Earned Sick Time law. Below we update our earlier advisory by summarizing the important changes from the draft regulations. Read more
With just weeks to go before the Massachusetts Earned Sick Time law goes into effect on July 1, 2015, the Massachusetts Attorney General’s Office is continuing to issue guidance and documentation relevant to the law, including the required notice posting and an update to its safe harbor regulation.
The AGO’s current draft regulations provide that this Notice of Employee Rights (and not an employer-drafted alternative), must be both posted in a conspicuous location at Massachusetts worksites and distributed to employees. The English language version of the required poster is now available here. The AGO’s notice contains the basic outlines of the law’s requirements, including, among other things, minimal required rates of accrual and carry-over, permissible reasons for use, employee notice obligations, and contact information for the AGO (as required by the authorizing legislation). It also reminds employees that sick time cannot be used as an excuse to be late for work, and that misuse of sick leave may result in discipline. Read more
On election day, Massachusetts voters approved a ballot initiative requiring employers to provide sick time to their employees. Absent legislative repeal, the mandatory sick time law will become effective on July 1, 2015. Organizations with eleven or more employees will be required to provide paid sick time, while organizations with fewer than eleven employees must provide unpaid sick time. Employers should review their sick time or PTO policies in the coming months to ensure compliance by the July 1, 2015 deadline. Employers who meet the specific requirements of the new law (including those described below) in a PTO, vacation or other paid leave policy do not need to provide a separate sick time entitlement.
Commencing on January 1, 2015, employers must report the following to the nearest OSHA-area office:
- Within 8 hours, a death in the workplace (regardless of reason or cause)
- Within 24 hours, and as a result of a workplace incident, the (1) hospital admission of one or more workers; (2) an amputation; and/or (3) loss of an eye.
Under the current rule, which stays into effect until December 31, 2014, employers must report a death or hospital admission of 3 or more employees, all within 8 hours.
Failure to follow these requirements can result in a $7,000 civil penalty (up to $70,000 for repeat violations) and hinder an employer’s ability to argue “good faith” in defending any resulting citations.
For more information, as well as a list of industries that, due to relatively low injury and illness rates, are exempt from the requirement to routinely keep illness and injury records, click here.
On August 8, 2014, Governor Deval Patrick signed into law a bill relating to domestic violence that, among other things, establishes a new category of job-protected leave for employees (the “Law”). Effective immediately, Massachusetts employers with fifty (50) or more employees must permit employees to take up to fifteen (15) days of unpaid leave per year if they or their family members are the victims of “abusive behavior,” which includes domestic violence, stalking, sexual assault, and kidnapping. Read more
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