In what has become a growing trend of legislation designed to close the gender wage gap between men and women, Massachusetts has adopted An Act to Establish Pay Equity. The new law makes it illegal for employers to ask job applicants for their salary history. The law will take effect on July 1, 2018.
The Massachusetts legislation follows on the heels of California’s Equal Pay Act, adopted in October 2015 and effective as of Jan. 1, 2016. Gov. Jerry Brown has since expanded that legislation by signing Assembly Bill 1676, which prohibits employers from relying exclusively on prior salary to justify pay disparities.
Like California’s law, the Massachusetts bill broadens the definition of what is equal work to work of a “comparable character.”
Legislative trend
Hopping on the legislative bandwagon are New York and Maryland, which have both adopted legislation similar to California’s Equal Pay Act.
Several states have adopted less restrictive legislation addressing equal pay, among them Connecticut, Delaware, Illinois, Minnesota, Nebraska, New Hampshire, Oregon and Utah.
On the federal level, the Equal Employment Opportunity Commission (EEOC) has finalized a regulation that requires all businesses with 100 or more workers to submit pay data by gender, race and ethnicity.
But gender equity bills were defeated in Colorado, Hawaii, Louisiana and Washington, and vetoed by New Jersey Gov. Chris Christie. Christie said the bill would make New Jersey “very business unfriendly.”
Wage gap lessening
Although federal law prohibits gender-based pay discrimination, wage gaps persist. However, new research indicates the gender wage gap is lessening. Pew Research says full-time working women earn 84 cents for every dollar earned by men. In addition, it reported that the gap had closed to 93 cents for women ages 25 to 34. Career site Glassdoor, which compared workers with the same job title, employer and location, said women earn 94.6 cents for every dollar earned by men in the same positions.
Businesses take heed
President Barack Obama has taken several steps to reduce the wage gap during his presidency. Most recently, the White House challenged public sector businesses to take the Equal Pay Pledge. In June, 28 companies – including Amazon, Johnson & Johnson, Staples and the Dow Chemical Co. – pledged to conduct an annual gender pay analysis across all job categories.
Businesses are also becoming more transparent about the results of such audits. PricewaterhouseCoopers published the results of a pay analysis it conducted in Britain in 2014. After uncovering a15.1 percent pay disparity between men and women, the company made a concerted effort to bring more women into senior leadership roles. Salesforce, a cloud software company, reported last year that it spent $3 million to close the gender pay gap.
Closing the wage gap will have positive economic consequences for the country, according to the Institute for Women’s Policy Research. An analysis of federal data conducted by IWPR showed that the poverty rate for working women would be cut in half if they were paid the same as men in comparable jobs.
We applaud Massachusetts’ efforts to close the wage gap. Since women typically earn less than men do, basing their salary on previous pay perpetuates the wage gap.Companies should set the value of a particular job – not base it on what an employee has been earning elsewhere. We hope this law becomes a model for other states.