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AIM Backs Compromise Wage-Equity Bill

Posted on July 13, 2016

Associated Industries of Massachusetts announced that it supports compromise pay-equity legislation passed by the House of Representatives on Thursday.

Fourpeople.jpgThe bill recommended late yesterday by the House Ways and Means Committee follows weeks of intensive negotiations among AIM, House leaders at Attorney General Maura Healey. AIM unequivocally supports pay equity, but opposed previous versions of the measure that would have limited the ability of employers to attract and retain skilled employees.

“The compromise ensures that workers will be fairly compensated without regard to gender but instead according to the value they bring to the business enterprise,” said Richard C. Lord, President and Chief Executive Officer of AIM.

“The Board of Directors of AIM very much wanted to support a pay-equity initiative, so we rolled up our sleeves and worked collaboratively with the House and the Attorney General to develop to ensure that the bill worked both for employees and 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. Unlike the overly proscriptive bill passed by the Senate in April, the House version 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 4,500 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.
  • It eliminates an outright ban on salary-history questions contained in the Senate version and replaces it with language that allows an employee to voluntary disclose salary information and then allows an employer to ask the employee to confirm prior wages after an offer has been made.
  • Affirms the ability of employers to protect the confidential information about employee wages should another employee seek that information.

“The bill is not perfect, but that is the nature of compromise and negotiation,” Lord said. “But the bottom line is that employers committed to hiring the best people regardless of gender may continue to design their compensation programs based upon market conditions.

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.

John Regan, Executive Vice President of Government Affairs for AIM, credited House Speaker Robert DeLeo, Speaker Pro Temp Patricia Haddad of Somerset, House Ways & Means Committee Chairman Brian Dempsey of Haverhill and Attorney General Healey for listening to the concerns of employers.

“We continue to 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,” Regan said.

The law would take effect on July 1, 2018.