New Legislation for Wage Parity

August 9, 2016

As the subject of wage parity heats up across the nation, Massachusetts, the oft-forgotten competitor for Most Progressive State, has passed a new law that will certainly make New York and California sit up and take notice. The law, which was signed last week and takes effect in July of 2018, will institute some new measures intended to address some of the root causes of the gender wage gap:

 

1. Employers will no longer be permitted to ask an applicant's wage history. On one hand, this is a good first step toward eliminating some of the hidden bias in pay, because a woman's shallower wage growth curve will not be part of a salary negotiation. I've not always understood why employers ask for this information. It seems the only reason they would is so they can offer less money to someone for the same job simply based on what they were making before, and can you think of any fair reason to do this? If a job has a particular value to an organization, the pay should be self-evident - then base the salary offered on qualifications.

On the other side of the coin, there are plenty of ways to get this information without directly asking the applicant. Even without knowing the exact number, the internet has made it possible for companies to get a good ballpark figure on what someone in a particular role could earn. It's good that employers not ask about previous salary, but this may be a futile gesture in the end.

 

2. Employers will need to state their compensation for the position up front. This bit fascinates me. A completely unscientific review of quite a few job postings on LinkedIn, Monster and CareerBuilder lead me to believe that this has become unheard-of in today's job market. In a world where job seekers were more concerned with getting any available job than how much it paid, compensation became less important than the simple fact that a job was open. This trend may reverse itself as the market becomes more competitive for the applicant.

 

The unspoken, unintended consequence of this will mean that pay transparency will absolutely skyrocket in Massachusetts. It is also now forbidden to prevent employees from discussing their salaries with co-workers thanks to this law, but beyond that, the going rate for all sorts of work will be laid plain in front of the world for both job seekers and lookie-loos to review and compare. Hopefully some hero will take on the task of crunching numbers and turning an analytical eye to the data it makes available to the public.

3. Employers are encouraged to self-audit. The law makes it clear that the information uncovered upon a self-audit of pay parity within an organization would not be available for use in proceedings against them, nor would they be subject to penalties. In addition, showing a good faith effort to uncover disparity and make wages more fair can be considered an affirmative defense against a lawsuit. This is where I believe the law can have the greatest impact on wage gap issues. Most of the time when women are paid less than men, it was not intentional. Encouraging companies to take a look at this information can help them understand how they are really doing on equal pay, and simply by bringing awareness to a topic, change can come.

 

It, naturally, remains to be seen how much of an impact the law will have on the wage gap, but the provisions in it are promising. What is left undone at this point is any practical way to address what I see to be the biggest contributor to the problem - unknown biases. That will prove nearly impossible to legislate.

 

 

 

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