Q: I am a technical sales engineer. I work mostly in the Cambridge area. I know I am reasonably compensated, based on calls I get from headhunters. I have several different peers across the US. In my opinion, we are all probably reasonably compensated for our skill set. Our company offers a strong benefits program too, including a great medical plan, a company-matched 401(k) plan, some telecommuting opportunities and a tuition reimbursement plan. I have heard grumblings from others in my same role. I am also hearing about a new equal pay law. My question is this – will my pay be reduced because of a few others who live in other locations like Kansas City, Minneapolis and Bangor?
A: Congrats on working for an employer who seems to pay competitively, based on what you have provided. Cambridge is one of the most challenging areas to attract and retain talent.
I think you may be referring to the Massachusetts Equal Pay Act (MEPA). MEPA is scheduled to go into effect on July 1, 2018. Many companies are preparing for July 1 to ensure that they are in compliance. Employers are encouraged to complete a self-evaluation prior to July 1. If an employer completes a review of their pay practices and demonstrates progress toward eliminating unlawful pay disparities, based on gender, this can be helpful in defending any wage-related claims. The Attorney General (AG) has published some guidance on how to determine if such disparities exist. In the detail provided by the AG, the AG has stated that salary reductions cannot be used to bring the employer into compliance.
You raise a reasonable question. What if there are legitimate reasons for pay disparities? Geographic location is one reasonable explanation for some pay disparities. I would be shocked if your company compensated a technical sales engineer in Cambridge at the same pay rate as an employee in a comparable role but working in Kansas City. Other reasons may include seniority with the employer, performance or merit, education or training, or even travel (if it is a required and consistent part of the job).
You also mention several parts of an employee’s compensation plan that matter. Sometimes employees forget that benefits typically represent a significant expense to many employers. Under MEPA, “wages” can include several forms of remuneration including incentives, bonuses, commissions but also pay related to time off, travel allowances and some of the benefits you list (health insurance, tuition reimbursement).