Massachusetts Attorney General Revises FAQs on COVID-19

By Bello Welsh LLP

The Massachusetts Attorney General’s Office, Fair Labor Division, has updated its list of Frequently Asked Questions About COVID-19, including an expanded response to the question of whether an employer that conducts a temporary layoff must pay final pay—including accrued vacation—at the start of the layoff (now numbered Question 3).  The AG’s original response reflected that when an employer conducts a “temporary layoff,” accrued vacation is due at the start of the layoff.  The revised response adds that if an employer takes an action that is intended to continue the employment relationship, for example instituting a “furlough” in which health and other benefits are maintained, the AG will not consider this to be a discharge for purposes of the Wage Act, and accrued vacation pay will not be due at the start of the furlough.  However, if an employer becomes unable to continue contributions toward employee benefit plans, this will be deemed a discharge, triggering the employer’s obligation to make full payment on the next regular pay day.

In short, in this revised response the AG draws a distinction between a “temporary layoff,” in which the employment relationship is severed (even if temporarily) and another action (sometimes called “furlough”) in which the relationship continues to some degree.  Regardless of what nomenclature is used, employers considering reductions should be aware of the AG’s position on this issue.

The revised FAQ document contains several other new items, including references to paid sick leave and emergency FMLA under the FFCRA (which we discuss here, here and here), high level descriptions of the CARES Act (which we discussed here, here and here) and information for independent contractors.  The FAQ also highlights certain state-specific relief available to small businesses, including a fund run through the Mass Growth Capital Corporation and disaster assistance loans.

Of interest for employers, these new and revised FAQs confirm that the Massachusetts Earned Sick Time Law is a separate benefit, and that employers may not require employees to use sick time under the Massachusetts statute (or other employer-provided paid leave) before using the new federal paid sick time entitlement.

COVID-19: Changes to Massachusetts Unemployment Insurance Program

By Bello Welsh LLP

In response to the COVID-19 emergency, there have been several key changes made to the eligibility and work search requirements for unemployment insurance. The following summarizes the changes applicable to impacted claimants in Massachusetts, and highlights additional changes that could be implemented as a result of the federal legislation that was just passed by the United States Senate and is currently under consideration by the House of Representatives, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

WAITING PERIOD AND AMOUNT OF BENEFITS

Waiver of Waiting Period

Governor Baker recently signed an act temporarily authorizing waiver of the one-week waiting period for unemployment benefits for any person who has become separated from work as a result of any circumstance relating to the outbreak of COVID-19, or the effects of the governor’s March 10, 2020 declaration of a state of emergency. Accordingly, individuals who applied for unemployment on or after March 10, 2020 will receive benefits for the first week of unemployment.

Length and Amount of Benefits

Under existing Massachusetts law, eligible individuals can receive up to 26 weeks of unemployment benefits in a benefit year. The current weekly benefit amount is approximately 50% of the individual’s average weekly wage, up to a maximum of $823 per week. An individual may also receive $25 per dependent child.

The CARES Act would significantly expand the length and amount of unemployment benefits, by providing for an additional $600 per week, and an additional 13 weeks of benefits. (As this legislation remains subject to change, we will update this information as further details become available.)   This means that claimants will receive whatever unemployment benefit they would receive under state law, plus $600.  This could create the anomalous result that a claimant receives more in unemployment benefits than they would have been paid in the ordinary course; the bill is, of course, subject to change, whether before it passes or in a subsequent corrections bill.

Individuals who work part time hours may still be paid unemployment benefits if the gross wages are less than the individual’s weekly benefit amount. Such individuals must report any earnings to the Department of Unemployment Assistance (DUA) each week, and any earnings greater than 1/3 of the weekly benefit amount will be deducted from the weekly benefit payment.

CLAIMANTS IMPACTED BY COVID-19

The DUA has also filed emergency regulations, which make it easier for those impacted by COVID-19 to claim unemployment benefits. All requirements of attending seminars at the MassHire career centers have been suspended, and appeal hearings will be held by telephone only. Further, the DUA may excuse missed deadlines during the processing of a claim, if the reason for failing to meet the deadline is due to COVID-19.

Eligibility

Most individuals who are out of work due to being impacted by COVID-19 should be eligible for unemployment insurance benefits. Individuals who are temporarily unemployed due to COVID-19 – whether laid off, furloughed, or if their workplace is fully or partially shut down – and expect to return to work will be considered to be in “Standby Status,” and are eligible for unemployment benefits. According to the DUA’s updated guidance for filing a new unemployment claim, being impacted by COVID-19 for purposes of unemployment eligibility may also include, but is not limited to, the following:

  • Employee or someone in his/her household is quarantined (whether due to an order by a civil authority or medical professional, or a self-imposed quarantine based on a reasonable fear of illness or exposure)
  • Employee leaves employment due to reasonable risk of exposure or infection or to care for a family member and does not intend to or is not allowed to return to work
  • Employee, or someone the employee is caring for, is “high risk” (older adults and/or persons with serious chronic medical conditions)
  • Lack of childcare

Individuals impacted by COVID-19 will be presumed eligible for four weeks of standby status. Individuals do not need to provide medical documentation, and employers need not even respond that the individual is on standby. However, employers may request that standby status be extended to up to eight weeks, and the DUA can further extend such standby status if necessary.

Work Search Requirements

Individuals impacted by COVID-19 will not be subject to the usual work search requirements; rather, such individuals will satisfy this requirement by taking reasonable measures to maintain contact with their employer and being available to perform any work that their employer may have for them, that they are able to do. Note, however, that work will not be considered suitable if it endangers the health of the employee or others in the employee’s household, and an employee need not accept such work.

CLAIMANTS NOT IMPACTED BY COVID-19

Individuals applying for unemployment benefits for reasons unrelated to COVID-19 are still required to conduct a weekly work search, which may include reviewing job postings online or working on a resume. However, such individuals only need to accept suitable work; accordingly, if the individual is quarantined, self-quarantining, caring for a family member who is sick, or caring for a child who is at home, the individual does not need to accept work offered until these conditions resolve.

Independent Contractors and Self-Employed Individuals

Self-employed individuals and individuals whose compensation is reported on an IRS Form 1099-MISC (“independent contractors”) are not currently eligible for unemployment benefits under Massachusetts law. However, the CARES Act would provide Pandemic Unemployment Assistance for certain self-employed individuals and independent contractors who are unemployed, partially unemployed, or unable to work due to COVID-19. We will update this information as details become available.

OTHER CONSIDERATIONS for Employers DUE TO COVID-19

Distribution of Unemployment Handbook Upon Separation

The DUA has issued a new COVID-19 Unemployment Handbook, which provides detailed instructions on filing for benefits online.  Employers that communicate with employees via email may distribute this information electronically to employees upon temporary layoff or termination.  In addition, all employers are required to provide a pamphlet regarding unemployment insurance  to employees at the time of a temporary or permanent separation (which may also be done electronically).

Grace Period for Quarterly Reports and Contributions

Employers that are impacted by COVID-19 may request up to a 60-day grace period for filing quarterly wage reports and paying contributions. The DUA is currently looking at the effect of COVID-19 on employer rate charging, and rates will not change until January 2021.

WorkShare Program – An Alternative to Layoffs

To avoid layoffs, employers may apply to the Executive Office of Labor and Workforce Development and the DUA’s WorkShare program. This program allows an employer to reduce the number of hours worked by a specific group of employees by 10%-60%, while maintaining health insurance and other benefits. The decreased wages are partially offset by unemployment benefits. Employers must submit quarterly contribution and wage detail reports and pay unemployment taxes in a timely manner, and benefits paid to employees under an approved WorkShare plan are charged the same way as regular unemployment benefits. Interested employers should visit the WorkShare website for additional information about eligibility and creation of a WorkShare plan. However, employers should carefully evaluate whether the WorkShare program will meet the employer’s needs, as the program is not particularly flexible, and once a WorkShare plan is approved, workers must work the reduced hours stated in the plan each week.

Note that certain employees may be entitled to other forms of paid leave for reasons related to COVID-19, pursuant to the Families First Coronavirus Response Act signed March 18, 2020 and effective April 1, 2020. For more information about eligibility for paid sick time and emergency FMLA leave, please see Bello Welsh’s detailed alert on this topic.

We will continue to monitor legal developments related to COVID-19 and provide updates as new laws applicable to employers are enacted.

COVID-19: Impact on Massachusetts Workplaces

On March 23, 2010, Massachusetts Governor Baker issued an emergency Order Assuring Continued Operation of Essential Services in the Commonwealth, Closing Certain Workplaces, and Prohibiting Gatherings of More than 10 People.  A copy of the emergency Order may be found here:  https://www.mass.gov/doc/march-23-2020-essential-services-and-revised-gatherings-order.  A listing of essential services not subject to workplace closure may be found here:  https://www.mass.gov/doc/covid-19-essential-services/download.  A copy of the Assemblage Guidance (stay-at-home advisory) may be found here:  https://www.mass.gov/doc/march-23-assemblage-guidance/download.

If your business is not listed as an “essential service” but you think it should be listed, you may apply to have your business deemed as essential for purposes of the Emergency Order at this link:  https://www.mass.gov/forms/essential-service-designation-request.

The Massachusetts Attorney General’s Office has issued COVID-19 FAQs, which provides its perspective on how to navigate the impact of COVID-19 on the workplace.  A link to these FAQs, which the Attorney General’s Office has promised to update as circumstances change, may be found here:  https://www.mass.gov/doc/covid-19-fld-faqs.

The Massachusetts Department of Unemployment Assistance has issued a new handbook for employees, that should be provided upon temporary layoff (furlough) or termination, at least until the COVID-19 crisis is over.  This is over and above the standard unemployment pamphlet that must be provided.  A copy of the new pamphlet may be found here:  https://www.mass.gov/doc/filing-a-new-unemployment-claim-covid-19/download.  The one-week waiting period before benefits may be provided is waived for the time being.  Further DUA guidance may be found here: https://www.mass.gov/info-details/massachusetts-covid-19-unemployment-information.

For small businesses in need of recovery funds, the U.S. Small Business Administration’s Economic Injury Disaster Loan (EIDL) program is accepting applications from Massachusetts businesses. Applications are available here: https://disasterloan.sba.gov/ela.

We will continue to provide updates as events unfold.

Massachusetts Paid Family and Medical Leave Act: Updated

By Martha J. Zackin and Hayley Cotter

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

New Deadlines Established for Massachusetts Paid Family and Medical Leave Law

On December 3, 2018, we posted about the new Massachusetts Paid Family and Medical Leave Law (“PFML”).  Although the post was accurate at the time published, the Department of Paid Family and Medical Leave (the “Department”), has since pushed out some deadlines and made other changes.  We will be posting substantive guidance shortly, but in the meantime the updated deadlines are as follows:

  • April 29, 2019, the applications for private plan exemptions were made available online at MassTaxConnect.
  • June 30, 2019, written PFML notices must be distributed to all employees and contract works (pay reported on IRS Form 1099-MISC)
  • July 1, 2019
    • PFML laws and regulations effective (note that final regulations are now expected to be published on July 1, the effective date)
    • PFML posters posted
    • Payroll tax deductions begin (unless the company has applied for and been granted a private plan exemption)
  • September 20, 2019, applications for private plan exemption for Quarter 1 due
  • October 1, 2019, first quarterly report filed through MassTaxConnect
  • October 30, 2019, payments for Quarter 1 (July 1- September 30) remitted
  • January 1, 2021, most benefits available
  • July 1, 2021, all benefits available

Amendments to Massachusetts Law Concerning Criminal History Inquiries

By Justin L. Engel

In October 2018, amendments to Massachusetts law concerning employer criminal history inquiries became effective.  Under the previous version of the law, employers were prohibited from asking about: (i) an arrest, detention, or disposition regarding any violation of law in which no conviction resulted; (ii) a first conviction for any of the following misdemeanors: drunkenness, simple assault, speeding, minor traffic violations, affray, or disturbance of the peace; or (iii) any conviction of a misdemeanor where the date of the conviction or the completion of any period of incarceration resulting therefrom, whichever is later, occurred more than five years prior to the inquiry, unless the person had been convicted of any offense in the five years immediately preceding the inquiry.  Also, employers seeking information about an applicant’s prior arrests or convictions have long been required to include specific language notifying the applicant that he or she may answer “no record” in response to an inquiry about a matter that is sealed and providing other disclaimers.  Additionally, since 2010, Massachusetts employers have been prohibited from making any criminal history inquiries on the initial written employment application or prior to an interview.

The new law amends these restrictions in three ways: Read more

Massachusetts Raises Minimum Wage and Establishes Paid Family and Medical Leave

By Jennifer Belli and Justin Engel

In June 2018, Massachusetts passed a law that will gradually raise the state minimum wage to $15.00 per hour and establish a paid family and medical leave program for employees in the state.  The Massachusetts Department of Family and Medical Leave, a newly established state agency created to administer the leave program, recently issued FAQs for employers and employees, available here.  The requirements of the new law, as clarified by the FAQs, are explained below. Read more

Massachusetts Legislature Passes Non-Compete Legislation

By Jennifer Belli

The Massachusetts Legislature has passed a major overhaul of non-compete law, known as the “Massachusetts Noncompetition Act.”  Assuming Governor Charlie Baker signs the bill, it will apply to noncompetition agreements entered into on or after October 1, 2018.  This alert summarizes the key provisions of the Act.

What is a noncompetition agreement?

The Act imposes minimum requirements that noncompetition agreements between employers and “employees” (broadly defined to include independent contractors) must meet to be valid and enforceable.  For purposes of the Act, a “noncompetition agreement” means:

an agreement between an employer and employee, or otherwise arising out of an existing or anticipated employment relationship, under which the employee or expected employee agrees that he or she will not engage in certain specified activities competitive with his or her employer after the employment relationship has ended.

Notably, non-disclosure/confidentiality agreements, invention assignment agreements, employee non-solicit/no-hire provisions, and covenants not to solicit or transact business with customers, clients or vendors are not “noncompetition agreements” governed by the Act.  Likewise, noncompetition agreements made in connection with the sale of a business are not covered (provided the signatory is a significant owner of the purchased business and will receive significant consideration from the sale), nor are noncompetition agreements made in connection with an individual’s separation from employment (provided the employee is expressly given seven business days to rescind acceptance).

Are noncompetition agreements with certain categories of employees prohibited?

Yes.  The Act provides that noncompetition agreements are automatically unenforceable against four categories of employees: (1) employees who are considered non-exempt from overtime under the federal Fair Labor Standards Act; (2) undergraduate or graduate students who enter into an internship or other short-term employment relationship while enrolled in school; (3) employees age 18 and younger; and (4) employees who have been terminated without cause or laid off.  The Act does not define the terms “without cause” or “laid off,” but Massachusetts cases arising in other contexts have defined the related terms “good cause” and “just cause” quite broadly from the employer perspective.

What requirements must noncompetition agreements meet to be valid and enforceable?

Noncompetition agreements must meet a number of requirements to be valid and enforceable, including the following:

  • An agreement signed in connection with an employee’s hiring must be in writing and provided to the employee by the earlier of a formal offer of employment or 10 business days before the start of employment. As a practical matter, this means that an employee cannot begin working for 10 business days after receipt of an offer if the non-competition agreement is to be enforceable.
  • An agreement entered into after the start of employment, but not in connection with separation from employment, must be supported by “fair and reasonable consideration independent from the continuation of employment” and notice of the agreement must be provided at least 10 business days before it is to become effective. The Act does not define the term “fair and reasonable consideration,” but it certainly requires more than a de minimus  One potential option is a signing bonus directly attributed to the noncompetition agreement that is large enough to be (at least arguably) “fair and reasonable” under the circumstances.
  • The agreement must be in writing, must be signed by both the employer and the employee, and must expressly state that the employee has the right to consult with counsel prior to signing.
  • The agreement must be supported by a “garden leave clause” or “other mutually-agreed upon consideration between the employer and the employee, provided that such consideration is specified in the noncompetition agreement.” A garden leave clause is an employer’s agreement to pay an employee on a pro rata basis during the non-compete period at least half of the employee’s highest annualized salary in effect during the two years preceding the employee’s termination.  Notably, the Act does not require noncompetition agreements to include expensive garden leave provisions.  Mutually-agreed upon alternative consideration is acceptable, and the Act does not specify the amount or type of such consideration.  That said, it does appear that noncompetition agreements signed at the start of employment likely need to be supported by some consideration above and beyond the mere hiring of the employee.  An upfront agreement to pay an employee a lump sum at the time of separation from employment, for example, may suffice.
  • The restricted period may not exceed 12 months from the end of employment (except the period may be extended to up to two years from the end of employment if the employee has breached his or her fiduciary duty to the employer or has unlawfully taken, physically or electronically, property belonging to the employer).

Apart from these specific requirements, noncompetition agreements must be reasonable in all respects and consonant with public policy, as is required under existing common law.  The Act specifically provides that noncompetition agreements must be (1) no broader than necessary to protect the employer’s legitimate business interests in trade secrets, confidential information, and/or goodwill; (2) reasonable in geographic scope relative to the interests protected; and (3) reasonable in the scope of proscribed activities relative to the interests protected.

The Act creates certain presumptions of reasonableness.  For example, a noncompetition agreement will be presumed reasonable in geographic scope if it is limited to the areas where the employee provided services “or had a material presence or influence” at any time during the last two year of employment, and it will be presumed reasonable in scope of proscribed activities if it is limited to the specific types of services provided by the employee at any time during the last two years of employment.

Can a court reform an overbroad noncompetition agreement?

Yes.  As under existing law, a court may reform or revise an overbroad noncompetition agreement to render it valid and enforceable to the extent necessary to protect the employer’s legitimate business interests.

Can employers avoid the strict requirements of the Act with choice of law and forum selection clauses identifying a state other than Massachusetts?

                No.  The Act states that any choice of law provision that would have the effect of avoiding the requirements of the law is not enforceable “if the employee is, and has been for at least 30 days immediately preceding his or her cessation of employment, a resident of or employed in Massachusetts at the time of his or her termination of employment.”  Additionally, the Act requires that all civil actions relating to covered noncompetition agreements shall be brought in the county where the employee resides or, if mutually agreed by the employer and employee, in the Superior Court of Suffolk County.  It is not clear whether this provision is an attempt to limit enforcement of noncompetition agreements in federal court (for example in diversity cases), which may be subject to challenge.

What Should Employers Do Now?

                Assuming the bill is signed by the Governor, employers should promptly review and revise any form noncompetition agreements to be used after October 1, 2018 and determine what consideration to offer employees in connection with such agreements.  Employers may also wish to consider whether noncompetition agreements are necessary for certain employees or whether the same objectives can be achieved with other restrictive covenants outside the scope of the Act, such as provisions prohibiting solicitation of and doing business with customers.  Employers should also review their hiring processes and severance agreements to maximize the enforceability of noncompetition agreements.   We at Bello Welsh are available to assist and work with our clients on compliance with this new law.

               

 

Massachusetts Equal Pay Act: An Overview of the Attorney General Guidance

By Martha J. Zackin

On March 1, 2018, the Massachusetts Attorney General’s Office published guidance on the amendments to the Massachusetts Equal Pay Act (MEPA), as described below.

By way of background, the amendments, signed into law in 2016 and effective July 1, 2018, seeks to ensure that men and women are paid equal wages for comparable work. In sum, MEPA broadens the definition of comparable work, describes the limited circumstances in which variations in pay may be permissible, and prohibits employers from restricting discussions of wages or from seeking salary history from applicants.  Importantly, MEPA provides employers with an affirmative defense against pay disparities if they have completed a good faith self-evaluation of its pay practices and can show that they have made reasonable progress towards remedying pay differentials.

The Guidance, titled “An Act to Establish Pay Equity: Overview and Frequently Asked Questions,” seek to provide employers with clarification around key issues including: Read more

Bello Welsh Partner Quoted in Law360 Article

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