Massachusetts Passes New Pay Transparency Law: What Employers Need to Know

As Boston continues to be a leader in progressive labor laws, Massachusetts has introduced a new pay transparency law that will have significant implications for employers across the state. On July 31, 2024, Governor Maura Healey signed House Bill 4890, making Massachusetts the latest state to require salary disclosures in job postings. This law, set to take effect on July 31, 2025, is part of a broader movement aimed at ensuring fair pay practices in the workplace.

What Does the New Massachusetts Pay Transparency Law Require?

The new law mandates that certain employers disclose salary ranges in various employment situations, reinforcing the state’s commitment to wage transparency and equity. Here’s what you need to know about the key provisions of the law.

Who Is Covered Under the New Law?

The Massachusetts pay transparency law applies to:

• Employers with 25 or More Employees: Both public and private employers with 25 or more employees in Massachusetts are required to disclose pay ranges in job postings and other specific situations.
• Wage Data Reporting Requirements: Employers with 100 or more employees in Massachusetts, who are already subject to EEO-1 report filing, must submit wage data reports categorized by race, ethnicity, sex, and job category. Notably, this applies only to employees based within the Commonwealth, excluding those employed in other states.

Key Provisions of the Law

The new legislation includes several critical requirements that employers must adhere to:

• Disclosure of Pay Ranges: Employers with 25 or more employees in Massachusetts must disclose the pay range—defined as the annual salary or hourly wage expected for the position—in the following scenarios:
  • Job Postings: This includes both internal and external job postings published by the employer or any third party, such as recruiters.
  • Promotions, Transfers, or New Positions: Employers must disclose the pay range when offering an employee a promotion, transfer, or new position with different job responsibilities.
  • Upon Request: Employees or job applicants can request the pay range for the position they currently hold or are applying for.
• Wage Data Reports: Employers with 100 or more employees must submit workforce demographic and pay data reports by February 1 each year. These reports, categorized by race, ethnicity, sex, and job category, must be submitted to the Massachusetts state secretary.
• Exclusions: Unlike some other pay transparency laws, Massachusetts does not require employers to disclose benefits or other forms of compensation.

What Are the Penalties for Non-Compliance?

The Massachusetts Attorney General has exclusive jurisdiction over enforcement of this law. While there is no private cause of action, the law provides for penalties, including fines of up to $1,000 for third offenses. However, during the first two years after the law takes effect, employers will have two business days to cure any violation before penalties are imposed.

Steps Employers Should Take to Ensure Compliance

Although the law does not go into effect until July 31, 2025, it’s important for employers to begin preparing now. Gordon Law Group LLP recommends the following steps:

Conduct a Pay Audit

While not explicitly required by the law, conducting an internal pay audit is a proactive step that can help employers identify and address any existing pay discrepancies. This ensures that your business is prepared to meet the new disclosure requirements and aligns with best practices for wage equity.

Implement New Pay Disclosure Processes

Employers should establish clear processes for disclosing pay ranges in job postings and during internal job transitions. It’s also crucial to communicate these requirements to any third-party vendors, such as recruiters, to ensure consistent compliance across all employment-related communications.

Gordon Law Group LLP: Your Partner in Navigating Employment Law

At Gordon Law Group LLP, we understand the complexities that come with navigating new employment laws. Our team of experienced employment attorneys in Boston is here to help you adapt to these changes and ensure that your business remains compliant with all legal requirements. Whether you need assistance with a pay audit, implementing new disclosure processes, or understanding your obligations under Massachusetts employment law, we are here to provide the expert guidance you need.

For more information or to discuss how we can assist your business, contact Gordon Law Group LLP at (800) 403-7755 or visit our website at www.gordonllp.com.