Massachusetts joins the pay transparency game and ups the ante with new reporting requirements
On July 31, 2024, Massachusetts Governor Maura Healey signed into law a bill that makes Massachusetts the 11th state to mandate pay transparency, joining California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, New York, Rhode Island, and Washington.
Employers Must Provide Pay Information
Effective July 31, 2025, Massachusetts employers with 25 or more employees will be required to provide the following specific pay information to current and prospective employees:
- All job postings must include the pay range the employer “reasonably and in good faith” expects to pay for the position. This rule applies to any advertisement or job posting intended to recruit job applicants for a particular and specific employment position, whether directly or through a third party.
- Current employees who receive a promotion or transfer into a position with new responsibilities must be provided with the pay range for the new position.
- Upon request, current employees who hold a particular position, as well as those applying for a particular position, must be provided with the pay range of the position.
The pay ranges noted above need not include commission, bonus, or other incentive information. Information pertaining to employment benefits also need not be provided.
Employers Must Submit Pay Data Reports
In addition to providing pay information, effective February 1, 2025, employers with at least 100 employees that are already subject to federal EEO reporting requirements will also have to submit their EEO data reports to the Commonwealth of Massachusetts. The reports must include demographic information and pay data for all employees, categorized by race, ethnicity, sex, and job category.
Retaliation Is Prohibited
The new law prohibits employers from retaliating against applicants or employees who request pay information or allege violations of the statute. Massachusetts Attorney General will have exclusive jurisdiction over the enforcement of this law. Employees will not have a private right to action. The new law requires employers to review their current and future job postings and possibly overhaul wage reporting practices. Employers in Massachusetts must consider the appropriate pay ranges and communicate them transparently to their employees to avoid any surprises. Employers must be mindful of the February 1, 2020 deadline for submitting pay data reports to state. The rest of the law provisions will not take effect until July 31, 2025. The EPA offers a complete defense to any employer who, within the last three years, and before a lawsuit is filed, conducted a reasonable, good faith self-evaluation on its pay practices. Sheppard Mulin conducts regular audits for clients to ensure that they are in compliance with EPA regulations and can take full advantage of EPA’s provision for complete defense. These audits are also helpful in complying Massachusetts’ new pay-transparency law. Please contact us for a possible audit to ensure that your job postings and pay ranges and employee data reporting are compliant with the new law.
