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Legislature Approves Compromise Wage-Equity Bill

Posted by Brad MacDougall on Jul 21, 2016 3:20:57 PM

The Massachusetts Legislature unanimously passed on Saturday a compromise pay-equity bill hammered out among House leaders, the attorney general and the business community. The measure now goes to Governor Charlie Baker.

StateHouse-resized-600.png“The business community is gratified that legislative leaders are moving forward with a bill that ensures fair compensation for all workers while allowing employers to attract and retain skilled employees,” said Richard C. Lord, President and Chief Executive Officer of AIM.

“House Speaker Robert DeLeo and his leadership team deserve tremendous credit for reaching out directly to AIM and really listening to the concerns of employers.”

The legislation is intended to promote salary transparency, limit upfront questions to job candidates about salary history, and encourage companies to conduct reviews to detect pay disparities. It explicitly recognizes legitimate market forces such as performance and the competitive landscape for certain skills that cause pay differences among employees. 

That recognition will allow employers to continue to reward star performers and to compete in the white-hot market for workers with skills such as computer programming, engineering, advanced manufacturing and biosciences.

The bill states that “no employer shall discriminate in any way on the basis of gender in the payment of wages, or pay any person in its employ a salary or wage rate less than the rates paid to its employees of a different gender for comparable work.” Wage differentials are permitted, however, based upon:

  • a system that rewards seniority with the employer
  • a merit system
  • a system that measures earnings by quantity or quality of production, sales, or revenue
  • the geographic location in which a job is performed
  • education, training or experience to the extent such factors are reasonably related to the particular job in question; or
  • travel, if the travel is a regular and necessary condition of the particular job.

There were several additional provisions that persuaded AIM and its 4,000 member employers to support the House bill:

  • It provides a three-year affirmative defense from liability to employers who conduct a self-evaluation of their pay practices in good faith and can demonstrate that reasonable progress has been made towards eliminating wage differentials based on gender for comparable work. The self-evaluation may be of the employer’s own design, so long as it is reasonable in detail and scope in light of the size of the employer, or may be consistent with standard templates or forms issued by the attorney general.
  • Affirms the ability of employers to protect the confidential information about employee wages should another employee seek that information.

John Regan, Executive Vice President of Government Affairs for AIM, credited DeLeo, Speaker Pro Temp Patricia Haddad of Somerset, House Ways & Means Committee Chairman Brian Dempsey of Haverhill and Attorney General Healey for developing a workable compromise on pay equity.

The law would take effect on July 1, 2018.

 

Topics: Employment Law, Pay Equity

Why We Support Pay Equity...And Oppose the Pay Equity Bill

Posted by Brad MacDougall on Apr 19, 2016 7:30:00 AM

A company CEO called Associated Industries of Massachusetts last week to express concern because she had been told that the association opposed equal pay for women.

Two_Women.jpgNothing could be further from the truth.

AIM and its 4,500 member employers unequivocally support the principle of equal pay for equal work. We support and the federal and state laws that protect fair compensation.  We believe that the best long-term strategy to achieve pay equity in the workplace is to ensure that both women and men possess the education and skills that allow our enterprises to succeed an in increasingly complex global economy.

What we do not support is the deeply flawed legislation that well-intentioned lawmakers are debating on Beacon Hill in response to the wage gap. An Act to Establish Pay Equity, which was passed by the Senate on a voice vote and is now pending before the House of Representatives, represents a classic example of “right goal, wrong approach.”

The bill is duplicative and unnecessary. Its ambiguous language raises the possibility that the privacy of our employees will be compromised. It may limit our ability as employers to financially reward the star performers in our companies. And most importantly, the bill will not achieve our shared objective of ensuring that women earn the same as men for the same work.

The important point is this: Don’t confuse employer opposition to the bill with lack of support for pay equity.

AIM and its member employers are committed to providing fair compensation to employees according to the value and success they bring to our enterprises. In an economy where skilled workers remain at a premium, any company that does not value all of its employees equally is unlikely to be around very long.

Martha Sullivan, President and CEO of Sensata Technologies in Attleboro said it best during AIM Executive Forum panel discussion – “When you look at how much work you have to do to bring along great talent out of the engineering pool, the idea that you would not reward that talent based on meritocracy, based on performance and in an equitable way is just a really bad business decision,” she said.

That is why AIM is a charter member and supporter of the 100 Percent Talent Compact sponsored by the Boston Women’s Workforce Council. AIM and other signers of the compact agree to assess their own data to see if wage gaps exist, take steps to address those gaps, and anonymously provide data to BWWC to assess progress for the city as a whole in eliminating the wage gap.

That is also why AIM supports the online calculator developed by Massachusetts Treasurer Deborah Goldberg to allow women to calculate the wage gap in the industries in which they work and send anonymous notifications to employers to make them aware of the problem. Anything that stimulates employer introspection on wage equity brings us closer to solving the problem.

Cathy Minehan, former President of the Federal Reserve Bank of Boston and Co-Chair of the Boston Women’s Workforce Council, told the AIM Board of Directors on March 18 that pay equity is an enormously complex issue. She said differentials reflect factors ranging from the availability of reasonably priced and high quality day care; affordable housing and transportation; the fields women choose; and unconscious bias baked into workplace culture.

Regarding the Senate legislation, Minehan indicated “The law does not, and in many ways cannot, deal with these key issues.”

AIM strongly agrees. There are far more effective paths to pay equity than overly proscriptive legislation that endangers the privacy of employees and inhibits the ability of employers to run their businesses. We stand ready to work with all parties to locate those paths.

If you want to see AIM’s specific concerns with the pay equity bill, click here.

Topics: Massachusetts Legislature, Employment Law, Pay Equity

Pay Equality - Right Goal, Wrong Approach

Posted by Meghan Sullivan Esq. on Jul 21, 2015 9:57:00 AM

Megan B. Sullivan, Esq. is Managing Partner of Sullivan, Hayes & Quinn LLC in Springfield and a member of the AIM Board of Directors. 

An Act to Establish Pay Equity, scheduled for a hearing today on Beacon Hill, is another duplicitous law to benefit lawyers.

Two_WomenPlease don’t patronize me by pretending to create “new” protections  when you are not bringing anything new to the table on behalf of women.  The laws have long been clear:  No employer has been allowed to discriminate against women for decades. No employer has been allowed to discriminate against women in terms of compensation for almost a half century.

Since the 1930s, when the National Labor Relations Act was passed, no employer has been allowed to retaliate against an employee who discusses how much money they make or someone else makes. 

All of the alleged “new” rights outlined under An Act to Establish Pay Equity have existed for decades and have been supported by teams of government agencies employed for the purpose of regulating, investigating and enforcing the rights of women.

The only new element here is that the bill provides another way private sector lawyers can make more money.

Please ask our elected officials why they are copying an existing wheel and trying to suggest that a new invention is being deployed. 

Please ask why we are regurgitating existing rights rather than committing reources to enhancing existing solutions or otherwise investing in opportunities that present positive solutions and advancements in high paying fields of study or work to overcome barriers which inhibit opportunities?

Please ask our elected officials why they apparently did not know that they lead a state that scored first, second and third in the entire country, on issues related to the rights of women in the workplace!

According to the Institute for Women’s Policy Research, Massachusetts ranks third in the nation on its overall composite scores for opportunities for women and economic security.  On a critical component for women, health insurance, the same report ranks Massachusetts as first in the nation. On still another critical component, education, Massachusetts is ranked number two:  

http://statusofwomendata.org/app/uploads/2015/04/PO-Chapter-4.7.2015.pdf

While educational attainment overall for women in Massachusetts is exceedingly high, the Women’s Policy Research reports that educational progress made by women has not been distributed equally across racial and ethnic groups.  The report also finds that men continue to outpace women in certain degree programs  such as engineering. 

In light of the available research, it appears that Massachusetts is a remarkably successful state for women overall. If we desire to continue to excel at providing women opportunities, we need to focus on presenting opportunities for women and minorities in terms of education and training.  The passage of a gender neutral law, that arguably does not allow us to pay higher qualified women more than men, does not appear designed to accomplish the objective of increasing opportunities for the women in Massachusetts who need it most.

While the Institute for Women’s Policy Research finds Massachusetts as tied for number three in terms of earnings and employment, the same report finds an on-going wage gap flowing from the highest paid, Asian/Pacific Islander women to the lowest paid, Native American and Hispanic women.  Within the races identified, there is roughly a 50 percent annual difference between the medians of highest paid women and the lowest paid.  In other words, Asian and Caucasian women are out-earning Hispanic women, according to the study. 

A duplicative law focused on gender neutrality is not a tool that will accomplish any meaningful change to those numbers.

According to the White House Task Force on Equal Pay, “Education and outreach efforts educating employers and employees about their rights and responsibilities under our nation’s equal pay laws is essential to ending the pay gap. Many workers are unaware of their rights and of the fact that pay discrimination is still a problem in the twenty-first century American workplace. For this reason, Task Force members have spent significant time and resources educating the public about equal pay laws.”

During her inaugural address last January, Attorney General Healey demonstrated such education and outreach when she advised the commonwealth that “It’s against the law to pay a woman less for the same job!”   She is right. 

Treasurer Deborah Goldberg’s inaugural plan to create a new Office of Economic Empowerment  designed to build a statewide financial literacy program about college affordability, scholarships, loan repayment for science and math students and creating a structure of college savings plans for children who need it would be the kind of enlightened, multi-layered educational programs that could reflect the message recommended by the White House Task Force on Equal Pay.

As a management-side labor and employment lawyer and former assistant district attorney, I understood the inaugural addresses by women this past January when they spoke of hard work, educational attainment and support of family.  Having officials continue to enforce  the existing laws that prohibit pay inequality and discrimination reflects the values that I know were hard fought and won so women like me could have the opportunities I current enjoy.

But when I make decisions in my workplace, I am not looking at whether the employee is a member of a particular protected class. I am measuring performance-based on objective data, like hours worked, and subjective data like commitment to our customers.  When I decide that a female with fewer years of “seniority” has skills and abilities greater than a male coworker, under this new law, I will be precluded from advancing her career and rewarding her outstanding “hard work.”

I prefer to make business decisions based on non-discriminatory business reasons, rather than any politically expedient edict of the state or federal government.

When I see female employees outperforming their male counterparts, this gender-neutral bill precludes me from paying her more.

Long-term strategy to ensure pay equity in the workplace is to ensure that both women and men possess the education and skills that allow employers to succeed an in increasingly complex global economy. The dilemma of pay equity is influenced by a complex range of factors such as educational opportunities, family obligations, voluntary or involuntary absences from on-going training, and seniority in the workplace due to child care and other caregiver obligations.  

For the reasons described above, I oppose An Act to Establish Pay Equity. The bill is unnecessary and, most importantly, won’t achieve the proponents’ objective of ensuring that women earn the same as men for the same work. The mechanisms to further protect, support and enable women already exist.   And, U.S. Department of Labor data shows that the pay gap is narrowing among younger workers, with millennial women near parity. 

In the continuing areas of inequality, education and status as a racial minority, this bill does not offer any solution or improvement and it doesn’t even pretend to address those needs.

Associated Industries of Massachusetts, which hosts this blog and for which I serve as a director, also opposes the legislation, along with a plurality of the business community.

AIM and I both unequivocally support gender-based compensation equity. AIM supports The Boston Women’s Compact with the City of Boston, and the Executive Office of Labor and Workforce Development’s Women in the Workplace Initiative, which includes partner organizations like the Center for Women and Business at Bentley University. And I have spent much of my career working with employers to develop fair and competitive compensation and workplace policies.

Gender equity is more than a platitude for these companies. AIM’s new Blueprint for the Next Century economic plan makes clear that at a time when employers across multiple industries struggle to find qualified workers, any company that shortchanges half of its potential employees is unlikely to be around until the next economic cycle. Female software engineers not satisfied with their compensation at one company have plenty of options here in Massachusetts.

The Act to Establish Pay Equity  is fundamentally unworkable:

  • It would require job postings to include “minimum rate of pay,” a provision that places limitations on salary (from both perspectives) if it has to be specified in any advertisement.  Someone with the desired skills and experience may not apply for the job because she or he believes that the posted pay makes the job undesirable.
  • It would make it an unlawful practice to seek salary information from a potential candidate or for the employer to respond to a request from another employer.  Salary history is an important part of matching the needs of a potential employee with the wants of a business.
  • The proposed legislation does not exempt commission pay.  Would employers be able to pay commissions based on sales considering this could result in pay differentials not related to years of service?
  • How would businesses handle mid-career hires considering they have no service when they start?  They may need to be paid more than the lowest paid person based on their skill sets in order to attract them.
  • How would a business handle long-term unemployed hires considering they may not have the most up-to-date skills?  They may need a different rate of pay that reflects that necessary training required to bring the new hire up to par with others in a similar job.

Massachusetts lawmakers would far more effectively address gender equity by ensuring that women are prepared for the economic opportunities of the 21st century rather than trying to pretend like something new and exciting is being introduced when the anti-discrimination laws have existed for decades.

The current White House; the current State Treasurer; the current Attorney General have all expressed better ideas.  I propose we move forward with those ideas and actually work to provide minority women and female students with the tools they need to succeed in one of the best states in the country for female employees.

 

Topics: Pay Equity

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