Massachusetts's New Approach to Eliminating the Gender Pay Gap
On August 1, 2016, Massachusetts Gov. Charlie Baker signed Senate Bill 2119 into law, which takes several steps toward achieving pay equity for women. One interesting provision of the new law is that employers will no longer be allowed to ask applicants for their salary or wage history. This will make Massachusetts the first state, as of July 2018, to prohibit employers from inquiring about prior employment compensation. California introduced equal pay legislation with similar provisions in 2016, but the bill has yet to pass both houses.
According to the most recent data from the U.S. Census Bureau, full-time, year-round civilian women earned 79.5 cents for every dollar that men earned. As this figure can be misleading due to the fact that women may take more time off for the birth of a child and other family reasons, labor economists often look to weekly or hourly earnings to determine a more accurate gender wage gap. In terms of median weekly earnings, data from the U.S. Bureau of Labor and Statistics shows that women in 2014 earned 82.5 cents for every dollar that men earned. The same report showed the wage gap to be even smaller in terms of hourly earnings at 85 cents for every dollar that men earned.
Massachusetts lawmakers hope that prohibiting employers from inquiring about prior compensation will be a key factor in eliminating the gender wage gap, no matter how small or large it actually may be. Sponsors of the bill believe this will force employers to offer women salaries based on job qualifications and expected performance without factoring in prior compensation, which is, statistically, lower than their male counterparts. Even if employers are not consciously discriminating against women in the hiring process, basing salary offers off of prior wages may only perpetuate historical gender wage differences.
The biggest and most important provision of S.2119 is that no employer can discriminate in any way on the basis of gender in the payment of wages, including benefits or other compensation, for comparable work. One important caveat, though, is that employers may still pay different wages for comparable work if a bona fide seniority system or a bona fide merit system is in place. Here are a few other interesting provisions of the new Massachusetts law:
- Any employer that violates this law cannot reduce the pay of any employee in order to comply with these regulations.
- Any employer found in violation of the law is liable for paying affected employees unpaid wages and benefits, as well as additional liquidated damages.
- In addition to asking prospective employees directly, employers are also prohibited from seeking salary histories from current or former employers.
Will these new regulations effectively close the gender pay gap in Massachusetts? Only time will tell.