Massachusetts has approved a new pay equity law that bans employers in the state from asking job candidates about their salary history. The law will go into effect by Jul. 1, 2018.

According to Compensation.BLR.com, the equity law contains provisions that are broader than the current federal law. As early as now, companies are urged to plan changes for full compliance on time.

The law was signed by Governor Charlie Baker on Aug. 1. One of its aims is to strengthen pay equity for women. Under the new law, pay differences between employees would be acceptable only if based on: a seniority system, a merit system, a per-unit or sales compensation scheme, the job's geographic location or the amount of travel it requires.

The law defines "comparable work" as work that needs "substantially similar skill, effort and responsibility" and that is performed under "similar working conditions."

Employers will be penalized for requiring applicants to provide wage and salary history as part of its hiring process. The law also protects employees by prohibiting employers from reducing the salary for compliance. Employers will need to bring the pay of lower earners up to the pay of the higher earner doing "comparable work."

U.S. News noted that the law is a victory for job seekers since employers traditionally use information gathered during interviews to calculate salary offers. This meant that people who have been earning below-market wages, such as women and people of color, would have continued to be underpaid.

"The prohibition is designed to stop perpetuating pay inequality from employer to employer when employers offer to pay women applicants less than their male counterparts because the men were paid more at the last employer," Amanda Marie Baer, an employment lawyer at Mirick, O'Connell, DeMallie & Lougee, LLP in Massachusetts, said. The law is believed to erase the gender pay gap between men and women professionals.