How The Mass. Pay Equity Law Has — And Hasn't — Changed Things, 1 Year In

When a company needs help navigating the state's equal pay law, they call an attorney like Maura McLaughlin. She's a partner at Morgan, Brown & Joy, which specializes in employment law. And she's spent the past year reading the pay equity law over and over again.

"I will say some of it I think I could recite in my sleep," McLaughlin says laughing.

The major provisions of the law lay out several things employers can no longer do.

"Don't ask about salary history anymore, don't tell employees they can't talk about their wages, and don't retaliate against it if they bring a claim forward," McLaughlin ticks off, while sitting in her downtown Boston office.

Massachusetts' pay equity law is the first in the country to ban employers from asking prospective workers what they made at their last job. The goal is to prevent women from being stuck in a cycle of lower salaries.

Women in Massachusetts earn just 83 cents for every dollar men earn. A year ago this month, a state law went into effect with the aim of closing that gap. And over the past year companies have been working to comply with the new law.

McLaughlin's firm counsels dozens of large and small companies in various industries, including retail, education and health care. And she says they have to rethink how they determine salary for a new employee.

"We tell them often, turn the process on its head," McLaughlin says. "Look at what you think [the position] should be paid within the framework of your organization maybe even put that out there with your initial posting ... rather than looking at the candidate and saying, 'Oh, I can get a bargain because this person's only making X.' "

McLaughlin says a big challenge for her clients has been assessing their workforce to see if there are existing pay gaps.

One company that has done its own pay assessment is Eastern Bank. CEO Bob Rivers says the bank had reviewed pay in the past, before the law, as part of annual employee reviews.

"We went into this thinking that we're not going to find any sort of unexplained differences in terms of pay," Rivers says. "But, I have to say, we found differences that we can't explain."

Rivers says they found a few pay gaps for women, as well as people of color — mostly in middle management and below.

The law does outline some legitimate reasons for differences in pay — such as seniority or training. But that wasn't the case at Eastern Bank.

"We had some cases we couldn't explain why people were paid differently when experience, performance, position, etc. were essentially the same," Rivers says. "That's when we made the changes."

The changes meant giving people raises because companies can't lower anyone's salary to comply with the law.

Rivers says the equal pay law has made the company more diligent about pay equity. He's now also focused on how women and minorities move up the ranks of leadership in his company.

"It really is an ongoing thing. So this is not like one and done," Rivers says.

Today's tight labor market may also have an impact on pay equity.

"I don’t think the law has helped as much as the economy has helped," says Chris Geehern of Associated Industries of Massachusetts, which represents thousands of employers. "Employers continue to struggle with a persistent and structural shortage of qualified workers. So for any company who's trying to attract and retain good workers, pay fairness and pay equity is really kind of an expectation."

Massachusetts has had low unemployment for a while now — it's been less than 4% for the past three years. And yet data show the gender wage gap has persisted.

Some of that is due to broader cultural issues, such as bias against women in salary negotiations and promotions.

"It's going to take more than just a piece of legislation to close the gap but it is an important component," says Victoria Budson, the executive director of the Women's Public Policy Program at Harvard's Kennedy School of Government.

Budson, who pushed for the equal pay act, says the law does something crucial: It creates an incentive for employers to do regular pay assessments. That's because, under the law, the assessments can be used to defend a company in court if a worker sues over pay.

"So we'll really need to see over these next five years how many employers have chosen to move forward and do this internal wage audit, and what kind of results do we see from that," Budson says.

So far, there have been very few lawsuits under the equal pay law. There was a case against the Boston Symphony Orchestra that was settled. And there's an ongoing case filed by two administrators against Boston Public Schools.

The Massachusetts attorney general's office has received 22 worker complaints since the equal pay law went into effect. Some have been resolved without going to court, and some are still under investigation. Attorney General Maura Healey says over the past year, her office has given employers and workers guidance about the state's equal pay law.

"We are working to enforce this new law so that we can end wage discrimination once and for all and ensure there is equal pay for equal work in our state," Healey says in a statement.