Massachusetts governor Charlie Baker signed a law Monday (Aug. 1) that requires employers to pay equal pay for equal work, and, significantly, forbids companies from asking job applicants about their salary history. Previous salaries are often used to set pay, and can lock in lower pay for women. The bill also stops employers from prohibiting employees from discussing their salaries among one another, a tool used by businesses to keep workers in the dark about their salaries and depress pay.
The bill, which goes into effect on July 1, 2018, passed both houses of the state legislature unanimously, in part because it had the support of the state’s business community. The Boston Chamber of Commerce surveyed its members abut the proposed bill and found wide support, said Katie Hauser, that group’s director of communications. The chamber was able to lobby for language that clarified what constitutes equal work, and won exceptions that allow employers to pay workers more on factors like experience and geography, she said.
“There are probably some things that still make business uncomfortable but we were able to get to a place where we could compromise,” she said.
Job applicants are still free to volunteer their previous pay as part of their negotiation.
Pay disparity between men and women is still pronounced nationwide, even if the size of the gap is in dispute. The White House said in 2014 that women make 79 cents for every dollar earned by men, while last year Pew Research put the figure at 84 cents for full-time working women while noting that it had closed to 93 cents for younger women. And new research from career site Glassdoor, which analyzed pay by job title at individual companies, said women earned 94.6 cents for every dollar earned by men in the same positions.
The narrowing gap may indicate that the attention being given to the issue is paying off, and that legislation like 2009’s Lily Ledbetter Fair Pay Act, which expands workers’ ability to sue for lost pay due to discrimination, is encouraging employers to do the right thing.
Still, the prospects for wider adoption of the Massachusetts law are uncertain.
While eight states have legislation on the books prohibiting pay discrimination, and another 25 have bills pending, Massachusetts is the first state to bar employers from asking about prior salaries.
The Society for Human Resource Management, which lobbies for the HR industry, doesn’t have a formal position on the Massachusetts law, but believes that employers should have the ability to ask about previous salaries, according to Vanessa Hill, a spokeswoman. The group believes employers shouldn’t use previous salary as the sole factor to set pay, but that it should be considered along with experience, education and other factors.
SHRM also opposes the proposed federal Paycheck Fairness Act, which would institute some of the provisions in the Massachusetts law, such as barring employer retaliation for employees discussing pay. SHRM’s objection is that it limits employer flexibility to establish salaries and exposes them to litigation, in part because it doesn’t include the provision for experience and geography.
The US Chamber of Commerce, which lobbies Washington for big business, is also vigorously fighting the bill. The Chamber argued on its website “the bill would take compensation decisions away from employers and place judges and juries in the human resources offices of American businesses.”
If the provisions take root nationally, this wouldn’t be the first time Massachusetts has been a bellwether state when it comes to advancing public policy that later became national law. In 2006, Gov. Mitt Romney signed a law mandating health care for all. It became the foundation of 2010’s Affordable Care Act, or Obamacare.
This article includes a new comment from the Society for Human Resource Management, which asked to clarify its views after initial publication of the story.