E-Alerts
Massachusetts Enacts Pay Transparency Law
Yesterday, Massachusetts Governor Maura Healy signed legislation that will require employers with 25 or more employees to disclose expected salary ranges for posted job openings. The new measure also requires that employers with over 100 employees submit equal employment opportunity (“EEO”) data annually to the Commonwealth.
The legislation will take effect on July 31, 2025.
The new Massachusetts statute is similar to pay-transparency laws that have been enacted in other jurisdictions in recent years, including California, Colorado, Connecticut, the District of Columbia, New York, Rhode Island, and Washington.
Salary Range Disclosures In Job Postings
Under the new Massachusetts statute, covered employers (i.e., those with 25 or more employees) will be required to include the pay range for open positions in external and internal job postings.
A “posting” includes “any advertisement or job posting intended to recruit job applicants for a particular and specific employment position,” whether the posting is made directly by the employer or by a third party such as a recruiter.
“Pay range” is defined as “the salary range or hourly range that the covered employer reasonably and in good faith expects to pay” for the position at the time of posting. Unlike similar laws in other states, the “pay range” that must be disclosed does not encompass other anticipated forms of compensation, such as bonuses or commissions.
The new law also mandates that when an employee is offered a promotion or transfer to a new position with different job responsibilities, the employee be notified of the pay range for the new position. Additionally, the statute specifies that, upon request, an employer must provide the pay range for a particular position to an employee holding such a position, or to an applicant for such a position.
Determining each position’s appropriate pay range will become paramount for employers in complying with the new law.
Wage Data Reporting
The pay transparency statute also requires Massachusetts employers with 100 or more full-time employees to submit annual, industry-based “aggregate wage data reports” that include workplace “demographic and pay data categorized by race, ethnicity, sex and job category.” (Notably, the EEO-1 reports that employers with at least 100 employees are already required to submit under federal law should satisfy this requirement.)
This data will be made available, in aggregate and anonymized form, on the website of the Massachusetts Executive Office of Labor and Workplace Development. Employers must submit this data annually, by February 1.
Prohibition Against Retaliation
The new law prohibits employers from retaliating or discriminating against an employee for: (i) taking action to enforce their rights under the law; (ii) making any complaint to their employer, an agent of their employer, or the Attorney General regarding an alleged violation of the law; (iii) instituting any proceeding under the new statute; or (iv) testifying or preparing to testify in any such proceeding.
Enforcement
A silver lining for employers is that the pay transparency law gives the Attorney General exclusive jurisdiction to enforce its requirements. Accordingly, employees will not have a private right of action against their employers for alleged violations.
First violations of the statute will be subject to a warning, while the Attorney General will be empowered to assess fines for repeat violations, ranging from $500 for a second offense up to $25,000 for subsequent offenses, depending on the circumstances.
The new law also states that violations are not subject to treble damages under the Massachusetts Wage Act.
Recommendations For Employers
With the pay transparency statute slated to take effect a year from now, there are a number of steps that we suggest Massachusetts employers take:
• Carefully review the requirements of the new law, in consultation with experienced employment counsel.
• Review existing and expected employment positions and, with the aid of appropriate market research, begin formulating anticipated pay ranges.
• Train human resources personnel to ensure compliance with the new disclosure and reporting requirements.
• Consider whether to implement compensation adjustments for long-tenured employees, in light of any need to offer and publicize more robust compensation packages to attract new hires.
• Keep a close eye on pay transparency requirements in all states in which an employer does business. Multi-state employers might consider adopting a nationwide policy that complies with the most stringent pay transparency requirements that apply, as the number of states enacting pay transparency laws continues to increase.
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If you have questions about the new Massachusetts pay transparency statute, please feel free to reach out to one of our experienced employment attorneys.
