Got Employees in Massachusetts and New Jersey? What You Need to Know as MA and NJ Employers are Mandated to Break the Glass Ceiling

Q.  Are there any Equal Pay Acts that apply specifically to employers in Massachusetts and New Jersey?

A.  On July 1, 2018, an updated equal pay law becomes effective in Massachusetts, referred to as “MEPA” (Massachusetts Equal Pay Act). MEPA covers nearly all Massachusetts employers, irrespective of size, and most employees, including full-time, part-time, seasonal, per-diem, and temporary employees. Employees who telecommute to a primary place of work in Massachusetts also are covered.

The Massachusetts law provides that “[n]o 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.” “Comparable work” is not defined by an employee’s job title; rather, “comparable work” is work that requires substantially similar skill, effort, and responsibility, and is performed under similar working conditions. For multistate employers, employees in the same “geographic location” within Massachusetts are to be paid equally for comparable work.  The statute does not define the term “geographic location.”

Employers can rely on one of the six permissible variations in pay for comparable work: (1) a system that rewards seniority with the employer; (2) a merit system; (3) a system which measures earnings by quantity or quality of production, sales, or revenue; (4) the geographic location in which a job is performed; (5) education, training or experience to the extent such factors are reasonably related to the particular job in question; or (6) travel, if the travel is a regular and necessary condition of the particular job.

The State of New Jersey enacted legislation similar to the MEPA.  The Act, prohibits New Jersey employers from paying different salaries to employees based on any protected category, including sex, where the employees are engaged in “substantially similar” work.  Like Massachusetts, the effective date of the New Jersey statute also is July 1, 2018.

The phrase “substantially similar” work is not defined, other than a statement that it is to be viewed as a “composite of skill, effort and responsibility.” An employer in New Jersey may pay a different rate of compensation only if the employer demonstrates that the differential is made pursuant to a seniority system, a merit system, or the employer demonstrates that: (1) the differential is based on one or more legitimate factors other than sex (or any other protected category), such as training, education or experience, or the quantity or quality of production; (2) the factors are not based on, and do not perpetuate a sex-based or other protected-category based differential in compensation; (3) each of the factors is applied reasonably; (4) one or more of the factors account for the entire wage differential; and (5) the factors are job-related with respect to the position in question and based on a legitimate business necessity. A factor based on business necessity shall not apply if it is demonstrated that there are alternative business practices that would serve the same business purpose without producing the wage differential.

Both statutes significantly expand the reach of the concept of equal pay, by broadening the net of jobs used for comparison purposes to “comparable” (MEPA) or “substantially similar” (NJ). Both standards are somewhat vague and will need to be interpreted by the courts.  Employers in Massachusetts and New Jersey will have to evaluate their pay  structures carefully to comply with the law and to assess risks of actions under these statutes.

When MEPA becomes effective, employers with employees in Massachusetts not only will be unable to justify pay differential based on salary history, but also will not be permitted to ask for an applicant’s salary history prior to an employment offer, or seek such information through a recruiter. By contrast, the New Jersey ban on salary history questions, which was put in place by Executive Order effective February 1, 2018, applies only to employer that are state agencies.

Employers who violate either the Massachusetts or New Jersey laws will be liable for back pay and liquidated damages.

Rebecca Alperin and Tracey E. Diamond

 

 

 

 

California’s New Parental Leave Law Adds to the Complexities of Administering Leaves of Absence for National Employers

Q: I heard there is a new parental leave law in California.  How does it compare to other states’ laws and will it affect my business if I have employees in California?

A: Parental leave laws are one of the most complicated aspects of employment law to administer and track.  There are federal, state, and local laws at play, and there is very little uniformity across the laws and across the states.  Even within one state, there may be multiple laws applicable to parental leave, and it can be difficult to navigate the interaction and overlap between the laws.  California’s new parental leave law continues to add to this complexity.

As a starting point, it is important for employers to understand the difference between laws that provide leave entitlement and laws that provide compensation during leave. Laws that provide leave entitlement generally provide eligible employees with a certain amount of leave for qualifying reasons.  The leave is unpaid, but most laws and/or employer policies require or allow employees to use accrued paid time off for part or all of the leave.  Many states also have laws that provide compensation for time off, but do not necessarily provide a leave right.

California’s new parental leave law is an entitlement leave law.  Effective January 1, 2018, employers with 20 to 49 employees nationwide must provide up to 12 weeks of unpaid leave for baby bonding.  In essence, this expands to smaller employers the obligation to provide baby bonding leave under the California Family Rights Act (“CFRA”), which applies to employers with 50 or more employees nationwide.  To qualify for leave,  employees must have worked for the employer for at least 1,250 hours in the past 12 months, and work at a worksite where the employer employs at least 20 employees within 75 miles.

In addition to baby bonding leave (as mentioned above), the CFRA, a leave entitlement statute, provides employees up to 12 weeks off to care for an immediate family member with a serious health condition, or for the employee’s own serious health condition. A third California leave entitlement law – the California’s Pregnancy Disability Leave Law (PDL) – entitles an employee to up to 16 weeks of leave for disabilities related to pregnancy.   The PDL applies to employers with five or more employees nationwide, and there is no minimum requirement of number of hours or years worked for an employee to be eligible.

California’s leave entitlement laws work in conjunction with the state’s Paid Family Leave (“PFL”) program. California PFL is a compensation law, and provides up to six weeks of partial pay to employees who take time off from work to care for a family member with a serious health condition or to bond with a new child.  California PFL applies to all employers who employ one or more employees, and have been paid wages of $100 or more in any quarter of the previous calendar year.  There is no minimum number of hours or days worked for employees to qualify for California PFL benefits.  California PFL is only a compensation law, however, and not a leave entitlement law – thus, it does not create any rights to leave, but rather provides partial pay for leave taken under leave entitlement laws and/or employer policies.  If the leave taken under FMLA, CFRA and/or PDL is for baby bonding or to care for a family member with a serious health condition, the employee can partially fund the leave for up to six weeks through California PFL.

For employers with employees in more than one state, it is important to understand the differences between the statutes of each state, as well as the leave entitlement provided by the federal Family and Medical Leave Act (FMLA), and administer them accordingly.   New Jersey, for example, has an existing paid family leave law (PFL), which is similar to California’s law.  To be eligible for New Jersey PFL (a statute that provides compensation rights but not leave rights), an employee must have worked at least 20 calendar weeks or earned at least $7,150 during the 12 months preceding the leave.  New Jersey also has a leave entitlement law, but does not provide a leave entitlement for an employee’s own serious health condition.

As discussed in an earlier post, New York also has a new family leave law that is effective January 1, 2018.  Like California and New Jersey PFL, New York PFL provides partially paid leave for an eligible employee who is providing care for a family member with a serious health condition, and for bonding with a child.  New York PFL also covers  time off for reasons associated with a spouse, child, or parent’s active military duty.  However, unlike California and New Jersey PFL, New York PFL provides both leave entitlement and compensation entitlement.

Given the complexities around leaves, employers should ensure their Human Resources personnel are thoroughly trained, and have access to legal counsel for consultation.

Jessica Rothenberg