Notably, the new law does not require disclosure of bonus or commission eligibility, nor does it require disclosure of other employee benefits.
On July 31, 2024, Governor Maura Healey signed House Bill 4890 into law, and Massachusetts joined a growing number of states (California, Colorado, Connecticut, District of Columbia, Hawaii, Illinois, Maryland, Minnesota, Nevada, New York, Vermont, Rhode Island and Washington) and municipalities to pass wage transparency legislation.
Pay Range Posting
Beginning July 31, 2025, the new law will require employers with 25 or more employees in Massachusetts to disclose the pay ranges of employment positions on job postings and provide pay range information to existing employees (i) who are offered promotions, transfers and new positions, or (ii) upon employee request. Pay range is defined in the law as the annual salary or hourly wage range the employer “reasonably” and “in good faith” expects to pay for the position. Notably, the new law does not require disclosure of bonus or commission eligibility, nor does it require disclosure of other employee benefits.
Reporting to the Commonwealth
Employers with 100 or more full-time employees in Massachusetts at any time during the prior calendar year, and who are subject to the federal filing requirements of wage data reports (EEO-1 data report, EEO-3 data report, EEO-4 data report or EEO-5 data report), must submit their first round of their federal filings to the Secretary of the Commonwealth by February 1, 2025. The secretary will then submit this information (reflecting workforce demographics of race, ethnicity, sex and job category and pay data) to the Executive Office of Labor and Workforce Development.
Enforcement by the Attorney General
The Attorney General's Office may seek injunctive or declaratory relief and impose fines for failing to submit EEO reports or failing to post or provide pay range information as required. A first offense is punishable with a warning, a second offense is punishable by a fine of not more than $500, and a third offense is punishable by a fine of not more than $1,000. A fourth or subsequent offenses are subject to civil fines of $7,500 to $25,000 per violation. An “offense” includes one or more noncompliant job postings made by the same employer in a 48-hour period, meaning that even inadvertent omissions of pay range information could result in significant fines if not addressed quickly.
The Massachusetts state law does not provide for a private right of action for individuals and helpfully clarifies that no violation of the statute shall be construed to carry triple damages as set forth in the Wage Act.
What Should Employers Do?
As previously discussed in connection with California's pay transparency laws, the following steps should be considered by employers facing the new law in Massachusetts:
Remediate Potential Pay Issues Now
Consider an attorney-client privileged legal audit to identify and address pay differential issues in your workforce before they become a problem.
Be Ready to Respond to Compensation Questions from Current Employees
Many employees will want to know why they are not at the top of the pay scale. Your organization is not required to pay everyone the same amount. There are legitimate business reasons for pay differentials, such as: (i) seniority; (ii) merit; (iii) quantity or quality of production, sales or revenue; (iv) geographic location; (v) education, training or experience, if related to the job at issue; or (vi) travel. Be prepared to have honest conversations with employees who are not at the top of the scale, reminding them that a scale is a range of potential compensation.
Start Collecting Pay Information Now
If your organization employed 100 or more employees in 2024 (including workers from labor contractors), you will need to collect and sort pay data and demographic information about those workers.
Train and Be Proactive
The new rules will give would-be litigants and their counsel more information and leverage. Pay scale information may be used to support discrimination claims, and pay scale requests themselves may very well lead to retaliation or harassment claims as provided for in the statute. A well-trained workforce is your best first line of defense, and these new rules will lead to difficult conversations. But a “range” is just that—a top, bottom and space in the middle—and the new rules do not require “top only” compensation. Equip your managers to have those conversations in a productive, positive way.
Consider Additional Disclosures to Stay Competitive
Nothing in the new law prevents “estimated total compensation” descriptions in addition to satisfactory pay range disclosures. If the total compensation package is a selling point, consider how to make that clear. On the other hand, resist the urge to make decisions about compensation based on what other companies publicly share about their pay scales—there are potential antitrust implications to these new pay transparency laws.
For More Information
If you have any questions about this Alert, please contact Bronwyn L. Roberts, Lauren A. Appel, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.