Just over a week ago, on Sunday, July 7, 2019, the United States Women’s National Soccer team made history when it won its fourth FIFA World Cup, defeating the Netherlands 2-0. As was expected, the crowd reacted in celebration and, then, it unexpectedly began chanting “Equal pay, equal pay, equal pay!”
To bring you up to speed, the U.S. Women’s Soccer team filed a gender-discrimination and a Federal Equal Pay Act lawsuit against the U.S. Soccer Federation in March 2019 alleging that they are paid less than the U.S. Men’s Soccer team because of their gender. The Soccer Federation denied the Team’s claims asserting that the pay differences were “based on differences in aggregate revenue generated by the different teams and/or any other factor other than sex.” Such a defense is available under the Federal Equal Pay Act.
So, why is this important for employers in Massachusetts? As we’ve discussed on this blog, Massachusetts amended its Equal Pay Act (MEPA) in 2016 and the law went into effect on July 1, 2018. Under that law, the defense asserted by the Soccer Federation would not hold water. Employers can violate MEPA even if their pay decisions had nothing to do with gender discrimination and were based on factors other than gender, such as aggregate revenue or market demand. As amended, MEPA only allows six acceptable reasons for paying different wages to people of different genders: (1) a seniority system; (2) a merit system; (3) a system that measures earnings by quantity or quality of production, sales, or revenue (such as piece work or sales commissions); (4) geographic location of the job; (5) education, training, and experience, to the extent such factors are reasonably related to the job in question; or (6) the amount of travel required for the job, if travel is a regular and necessary condition of the job. If an employer pays employees of different genders differently for any other reason, the employer will have violated the law, even if that reason is a legitimate business-based reason and is not discriminatory.
There is a silver lining in MEPA for employers, however. One of the most important parts of the new law is the affirmative defense established for employers who conduct good-faith self-evaluations of their pay practices that are reasonable in scope and detail. An employer who conducts such an audit and makes reasonable progress towards eliminating any disparities based on gender cannot be held liable for gender discrimination under MEPA as long as the audit was conducted within the previous three years and prior to receiving a pay equity complaint. While employers can conduct such audits themselves, we recommend that employers seek the assistance of their employment counsel. In addition to assisting with the form of the analysis, an employment attorney can provide a legal opinion as to whether particular jobs are comparable under MEPA and whether justifications for pay disparities meet the requirements of the new law. Moreover, having an attorney involved in the self-evaluation means the evaluation will be protected by the attorney-client privilege, which means that an employer would only have to reveal the results of the self-evaluation in connection with any legal claim if it wanted to. Without this protection, an employer risks having its self-evaluation used against it if an employee files a claim.
If you haven’t yet conducted a pay equity audit to protect your business, you should consider doing so. Learn more about Skoler Abbott’s pay equity audit services.