Massachusetts Pay Transparency

Joining a growing list of states, Massachusetts Governor Maura Healy signed the Pay Transparency Act into law in July which will impose new salary disclosure requirements on Massachusetts employers. This expands onto the current Massachusetts Equal Pay Act’s commitment to closing the wage gap by providing applicants and employees with more wage information. 

Who: This impacts private and public employers with 25 or more Massachusetts employees. 

What: Disclosing salary and pay ranges to candidates and existing employees for an advertised position or promotion. 

When: The new law requirements will be phased in starting in February 2025 and be fully implemented by July 31, 2025. 

The Details 

For employers with 25+ Massachusetts employees: 

• Job postings: Salary range information included 

• Current employees: Provide pay range information to employees who (A) are offered a promotion or transfer to a new position with different job responsibilities or (B) upon request for the position they are already holding 

• Effective July 31, 2025 

Additional items for employers with 100+ Massachusetts employees: 

• Submit annual EEO and pay data to the Commonwealth, but only if the organization is subject to aggregated wage data reporting on the EEO-1 report  

• This includes workforce demographic & pay data categorized by: race, ethnicity, sex, and job category 

• Aggregated data will be published on the Massachusetts Department of Labor website by July 1 of each year 

• Submitted annually by Feb 1, starting Feb 1 2025 

Since the EEO-1 report does not currently require wage data reporting, the Massachusetts state reporting requirement appears to be on hold, unless the EEOC begins to require wage data reporting on the federal EEO-1 report again. 

What counts as a pay range? A pay range can either be an annual salary range or an hourly salary range. Either one should be what an employer reasonably and in good faith would expect to pay for a position. 

What about bonuses and benefits? Bonuses and benefits are considered supplemental compensation and disclosure is not required.  

Where does this information need to be posted? The law applies to advertisements or job postings intended to recruit applicants. This includes third parties or staffing companies that post positions for your company. 

What about remote employees? The law does not address whether it applies to positions that could be filled by an employee working remotely, either part time or full time, in Massachusetts. 

Compliance 

According to the anti-retaliation mandate, employers are prohibited from retaliating against any individual, both employee or applicant, who:  

• took action to enforce the rights provided by law 

• instituted a proceeding under the law 

• testified or about to testify in any proceeding 

• or making a complaint to an employer or the Attorney General.  

The Massachusetts Attorney General’s Office holds exclusive jurisdiction for enforcement, with penalties for non-compliance increasing with each offense. There is no private cause of action available to applicants and employees. 

Next Steps 

While February (for pay data reporting) and July (for pay reporting requirements) may seem far off, employers should begin comprehensively reviewing their compensation strategies now to ensure compliance. Businesses can begin by taking these steps: 

• Prepare an appropriate process to compile demographic and wage information required for the wage data report due by February 1, 2025. 

• Develop a process to consistently post required pay ranges in job postings for both internal, external, and third-party channels by July 31, 2025. 

With the focus of this law on pay transparency, now would be a good time to ensure you have developed a sound compensation philosophy. Conducting external market data benchmarking, creating or reviewing pay grades, evaluating your job architecture, and conducting a pay equity audit are all important steps you can take.  

Developing a compensation structure can help you: 

• See where your pay range falls within the market pay range 

• Create a reasonable pay range for job position postings 

• Consider and prepare to answer questions from both employees and applicants regarding pay ranges and how they are determined.  

• Address employee concerns about whether they are being paid equitably 

As always, Berkshire’s Compensation Services team is here to support you as you begin to chart a path toward compliance and pay equity. We can help you design or refine a compensation structure, benchmark your roles against market data to evaluate external equity, and conduct a pay audit to root out and help you resolve any pay inequities. You can learn more about our services here. 

Stay tuned – and sign up for Berkshire’s Compensation Newsletter – as we continue to report on the federal and state-level developments as they relate to pay transparency and the evolving landscape of pay compliance.