Massachusetts Adopts Pay Transparency Law: What Employers Need to Know

By Amelia J. Holstrom - Skoler Abbott

August 6, 2024

Last week, Massachusetts joined a growing list of states with pay transparency laws when Governor Maura Healy signed “An Act Relative to Salary Range Transparency” into law. The law, which will take effect in stages in 2025, requires many Massachusetts employers to file certain wage data/information with the Commonwealth of Massachusetts and to disclose salary/pay ranges in all job postings.  The law also protects a worker’s right to request salary/pay range information.  The law is aimed at eliminating gender, racial, and other wage disparities, according to the Office of Labor and Workforce Development. Here is what employers need to know.

Employers with 25 or more Employees have to Post Salary Ranges in All Job Postings

The law also requires employers with 25 or more employees to disclose pay range information to both applicants and employees in a number of circumstances.  First, employers must include the pay range — which is the “annual salary or hourly wage range that the covered employer reasonably and in good faith expects to pay for that position at that time” — in all job postings. This includes “any advertisement or job posting intended to recruit job applicants for a particular and specific employment position,” regardless of whether the employer recruits directly or utilized a third party for such purposes.  Additionally, these employers must provide pay range information internally to any employee who is offered a promotion or transfer to a new position. Lastly, upon request, these employers must provide pay range information to applicants for the position(s) to which they applied and employees for the positions they hold.  This portion of the law is effective July 31, 2025.

The statute also prohibits employers from retaliating against any employee, or applicant, who requests pay range information.

Larger Employers are Required to File Wage Reports with the Commonwealth

In addition to the new pay disclosure obligations discussed above, employers with 100 or more employees at any time during the calendar year who are subject to the federal EEO-1, EEO-3, EEO-4, or EEO-5 reporting requirements will be required to file provide certain wage data and demographic information to the Commonwealth of Massachusetts on an annual or every-other-year basis. EEO reports contain workforce demographic and pay data categorized by race, ethnicity, sex, and job category.

Beginning on February 1, 2025, employers subject to the EEO-1 reporting requirements will need to file a copy of their EEO-1 data report annually with the Commonwealth of Massachusetts, Employers subject to the EEO-3 and EEO-5 reporting requirements will need to file a copy of those reports with the Commonwealth every other year, beginning on February 1, 2025. Likewise, employers subject to the EEO-4 reporting requirements will need to file a copy of those reports every other year, beginning on February 1, 2026.

The reports submitted by employers will not be public records under Massachusetts law.  In other words, members of the public will not be able to request and receive copies of these records.  The Commonwealth, however, will use the data submitted by employers to publish aggregate wage and workforce data on the Department of Labor and Workforce Development’s website no later than July 1 of each year, beginning in 2025.   These aggregate reports will be broken down by industry.

Next Steps

Although the law’s effective dates may seem far away, employers should start preparing now to comply with the deadlines.  If not already in place, employers need to start developing pay ranges for each position in their workforce. Businesses may also want to consider conducting a pay equity audit to ensure that there are not any pay disparities, as employees will now be able to request and discuss this information in the workplace. (There are other important benefits to conducting a pay equity audit under the Massachusetts Equal Pay Act that we previously discussed here and here.) If you plan to conduct a pay equity audit, you should strongly consider working with your employment counsel to preserve the attorney-client privilege, which may prevent certain information from being disclosed in any subsequent litigation.

Employers who fail to comply with the law’s requirements can be subject to warnings (first offense) and fines for each additional offense. Any employers with questions should work with their labor and employment counsel to prepare for the new requirements.

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