It will soon be illegal for companies in Massachusetts to ask prospective employees about their current or former salaries, due to a new piece of legislation signed into law this week that will ban the long accepted practice. The measure, which will take effect in December 2018 and is the first of its kind at the state level, is seen as a major step toward equal pay for men and women.
"I think it's really exciting that this passed, it's the first one of the state laws to have this provision that employers cannot just turn to the past of someone they hire when they set the salaries," said Ariane Hegewish, the employment and earnings program director at the Institute for Women's Policy Research. California attempted to add a similar measure in a bill passed last year, but ultimately it was not included.
Hegewish said companies should base salaries on the value of the role and the worth of the individual. According to her, relying on a previous salary for guidance could perpetuate unequal pay that women or minorities were already receiving at their previous jobs.
"Focus on the job, focus on the performance," she said. "Don't focus on where people come from because we know there's discrimination in the labor market and that way it's imported into the organization."
Massachusetts already has an equal pay law on the books, but the salary history measure is just one of several new stipulations that were recently enacted. One of the biggest changes comes down to a single phrase. The law previously said equal compensation between men and women for equal work, but now the wording has been broadened to "comparable work," meaning the roles in question do not have to be identical.
Another key measure in the Massachusetts initiative encourages employers to audit their own workforce from the perspective of equal pay and remedy any discrimination that is uncovered. This policy draws from similar aspects of the Boston's Women's Compact that has been in place since 2013. The legislation will now offer a safe harbor of sorts to companies that choose to internally evaluate pay discrimination.
If a company chooses to conduct a pay audit and finds levels of discrimination, they will have three years to fix it before they can be sued over the inequity. Fear of legal backlash has impeded companies from conducting audits or self-reporting information, according to Hegewish.
"Companies should be proactively addressing equal pay issues and they shouldn't be afraid to do it, if they are seriously concerned about addressing it," she said, referring to the appeal of the new measure.
The national conversation about equal pay has garnered increasing attention in recent years,. The White House has its Equal Pay Pledge initiative, and the issue took center stage during presidential primary debates this year. Recent attempts to improve the federal wage gap laws that are currently on the books have been blocked, largely by Republicans, but Hegewish thinks working at the state level is the next best way to move forward.
"There's a groundswell [of attention]," she said. "Companies know we need to get good motivated women and if women feel they're not valued as much as men, then it's unlikely we're going to recruit the best or get the best out of the best."
Follow Kayla Ruble on Twitter: @RubleKB