The amended Massachusetts Equal Pay Act (MEPA) goes into effect July 1, 2018. The purpose of the new law is to ensure that all workers in Massachusetts are paid equally for comparable work performed and to provide the opportunity to earn competitive salaries in the workplace. This new law imposes strict equal pay obligations on employers and limits certain information employers can request regarding the salary history of job applicants and generally prohibits employers from restricting employees from discussing their salaries.
MEPA applies to all employers in Massachusetts, with some very limited exceptions, and also applies to employers outside of Massachusetts that have employees with a primary workplace in Massachusetts. Cannabis employers should take steps now to ensure their forms and policies comply with the MEPA requirements as well as undertake a self-evaluation of their pay practices, so that the employer can avail itself of the affirmative defense under MEPA.
Specifically, MEPA prohibits employers from paying different wages to employees of different genders who perform “comparable work,” defined as work that “requires substantially similar skill, effort, and responsibility, and is performed under similar working conditions.” In the cannabis industry, this could range from crop managers to horticulturalists, chemists, transportation specialists and other roles. Wages are defined broadly to be “all forms of remuneration for employment” and include hourly wages, salary, bonuses, commissions, vacation, health insurance, and other fringe benefits. MEPA does not define “substantially similar,” “skill,” “effort,” or “responsibility.” However, the Massachusetts Attorney General issued a guide in the form of Frequently Asked Questions, which provides further information concerning MEPA. Cannabis business owners should take care to read these FAQs thoroughly.
In short, the guide provides that:
Comparability cannot be determined based on job titles alone.
MEPA permits variations in pay based on only six statutory factors:
These six factors are exclusive factors on which variations in pay can be based in the cannabis industry. MEPA does not recognize any other valid reasons for pay variations between persons of different genders performing comparable work. Employee wage or salary history cannot be a basis for a variation in pay and will not be a defense to a claim of unequal pay. Likewise, an employee’s agreement to work for less than a comparable wage will not be a defense to a claim of unequal pay. An employer who violates the statute by paying unequal wages to employees of a different gender for comparable work will be liable for the amount of the wages, plus an equal amount in liquidated damages and attorney’s fees.
MEPA also prohibits additional employment practices that can result in liability. A cannabis employer is prohibited from:
Cannabis employers may prohibit human resources employees, supervisors, or employees whose job responsibilities give them access to other employees’ compensation information from discussing or disclosing such other employees’ wages. However, these particular categories of employees may discuss or disclose their own wages and cannot be prohibited from doing so.
MEPA provides cannabis employers with a complete defense to an unequal pay claim if the employer has conducted a good faith, reasonable self-evaluation of its pay practices within the previous three years and before an employee sues. The self-evaluation must be reasonable in detail and scope, and the employer must show reasonable progress towards eliminating any unlawful gender-based wage differentials revealed by its self-evaluation. Employers eligible for this defense under MEPA will also have a defense to liability for any pay discrimination claim under the Massachusetts law prohibiting discrimination in employment. However, this affirmative defense does not apply to claims under federal laws including the Federal Equal Pay Act. Employers should consult with counsel before conducting a self-evaluation as it may be discoverable in government investigations or litigation.
MEPA significantly increases the potential liability under MEPA’s provisions for significant damages for employers – in any industry – that do not take affirmative steps before July 1, 2018, to revise forms, policies, and practices to be in compliance with MEPA and undertake a good faith, reasonable self-evaluation of its pay practices. Under MEPA, the cannabis employer’s intent is irrelevant. Unless a pay differential can be justified by one of the six exclusive statutory factors listed above, the employer will be liable for paying employees of one gender less than employees of another gender who perform comparable work. Employees and their attorneys are well aware of the general existence of pay inequality in the workplace. Any existing pay inequality will be a MEPA violation on July 1, 2018, absent the employer conducting a good faith reasonable self-evaluation.
Cannabis employers will be well served to take reasonable steps now to protect themselves against unequal pay claims under MEPA.
Lawrence J. Casey is a shareholder at the Boston law firm of Davis, Malm & D’Agostine, P.C., practicing in the business, employment and litigation areas. He represents executives, professionals, and employers in employment-related litigation and arbitration matters before state and federal courts and agencies. He also counsels high-level executives and professionals in matters concerning employment terms and compensation packages, including negotiating complex employment and transition agreements. Larry is a frequent speaker on employment-related topics. He is an Elected Fellow of the College of Labor and Employment Lawyers, is recognized by Best Lawyers in America and Chambers USA, holds a Peer Review AV® Preeminent™ rating by Martindale-Hubbell, and is listed as a Massachusetts Super Lawyer.
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