How to Close the Gender Pay Gap: Massachusetts Leads the Way

The Massachusetts legislature just unanimously passed the strongest equal pay law in the country. In spite of a legal prohibition against gender-based pay discrimination passed by the state in 1945, the gender wage gap has persisted. Shirley Leung of the Boston Globe reports that currently

• Women in Massachusetts, in general, make eighty-two cents for every dollar a man earns
• Black women fare worse at sixty-one cents for every dollar a man earns
• Latinas fare even worse at fifty cents per dollar

Clearly, having state and federal laws prohibiting pay discrimination on the books for decades has not worked to close the pay gap. The Massachusetts law, which takes effect in July 2018, addresses the wage gap in the following ways:

• The new law takes steps to promote salary transparency. While companies are not required to publish salaries, employees in Massachusetts can now openly discuss their salaries and join together to compel employers to monitor and fix wage gaps. Employees are still responsible for demanding that wage monitoring occur, but a group of fifty companies in Boston have volunteered to do wage-gap audits and publish their results, which could influence other organizations to act before their employees pressure them to do so. The state treasurer has also set up a website, equalpayma.com, to help women understand how underpaid they might be.
• The law sets new standards for determining comparable work. These standards did not previously exist, so winning a lawsuit claiming unequal pay for comparable work was almost impossible.
• The law provides companies with new incentives to monitor and correct wage discrepancies—if they do so, they get legal protection if workers sue for gender-based discrimination. They will be given three years to demonstrate they have corrected the problem if employees sue.
• The new law also prohibits employers from asking the wage history of applicants until after the employer makes an offer with a salary figure attached. This can help prevent women and minorities from being locked into lower salaries.

This new legislation arose from Boston mayor Tom Menino’s establishment of the Women’s Workforce Council in 2013. This council included representatives of many stakeholder groups and drew upon extensive research reported by Iris Bohnet in her new book, What Works: Gender Equity by Design. Transparency and accountability, two of the most important findings reported by Bohnet, are at the core of the new Massachusetts laws. Focusing only on the gender-wage gap is not enough—we must also address the race-wage gap. New state and federal laws must be passed to provide transparency and accountability for pay equity across race and gender. As Shirley Leung notes, wage gaps are often not intentional. In fact, they are often the result of unconscious bias. But as noted by Katie Donovan, founder of Equal Pay Negotiations, “as long as organizations do not analyze and publish salary data, they have ‘plausible deniability.’” While I believe the Massachusetts law could have gone further, it is a great start, and I hope other states will follow with their own innovations until we finally close the gender- and race-wage gaps.     The image in this post is in the public domain courtesy of Thomas Breher.]]>