After an extended legislative process, pay transparency requirements are coming for Massachusetts employers. On July 24, 2024, the Massachusetts House and Senate passed a bill requiring employers with over 25 or more employees in the Commonwealth to disclose salary range information on job postings, and to provide pay range information to current employees in certain circumstances. The legislation also requires private employers with 100 or more Massachusetts employees to submit EEO and pay data to the Commonwealth annually for purposes of aggregated public reporting by the Massachusetts Department of Labor. Governor Healey is expected to sign the bill into law promptly.
The new law generally tracks the provisions of bills on which we previously reported in November 2023. Although the general obligations for employers remain unchanged, the legislature has incorporated a number of provisions favorable to employers.
Effective Dates
The new salary disclosure requirements of the law will go into effect one year from being signed by the Governor. Employers are required to submit their first round of EEO and pay data to the Commonwealth by February 1, 2025.
Salary Range Posting Requirements
The new legislation aligns with recent statutes in a number of other states that have adopted pay transparency requirements over the past several years. The final bill requires private employers with at least 25 employees in the Commonwealth to:
- post the "pay range" for a particular position on all job postings,
- disclose the pay range for a position to employees who are offered a promotion or a transfer to a new position with different job responsibilities, and
- upon request, provide the pay range for a particular position to an employee holding the position or to an applicant for the position.
"Posting" encompasses "any advertisement or job posting intended to recruit job applicants for a particular and specific employment position," including posts made directly by an employer or indirectly through a third party.
"Pay range" is defined as "the annual salary range or hourly wage range that the covered employer reasonably and in good faith expects to pay for such position" at the time of posting. Unlike laws in other states with recently enacted pay transparency laws (e.g., Maryland, Minnesota, Washington), the Massachusetts bill does not require disclosure of bonuses or other benefits.
Reporting Obligations
The final bill also requires private employers with 100 or more employees in the Commonwealth at any time during the prior calendar year to submit an annual EEO data report that includes workforce demographic and pay data categorized by race, ethnicity, sex, and job category. Unions, state and local governments, and elementary and secondary school systems will need to submit similar information every other year.
The new law does not necessarily create substantial additional paperwork for private employers because submission of a properly completed federal EEO-1 Employer Information Report will satisfy this filing requirement. Employers must submit this data to the Secretary of the Commonwealth annually by February 1. The Secretary will then provide this information to the Massachusetts Department of Labor for the publication of aggregated data on its website by July 1 of each year.
Individual employer EEO reports will not be considered "public records" subject to disclosure under the Massachusetts Public Records Law. However, employers should be aware that such records may still be susceptible to discovery in litigation.
Prohibition Against Retaliation
The bill makes it unlawful for a covered employer to discharge or in any other manner to retaliate or discriminate against an employee or applicant who has:
- taken action to enforce the rights provided by the law,
- made a complaint to their employer, the employer's agent, or the attorney general regarding an alleged violation of the law,
- instituted a proceeding under the law, or
- testified or is about to testify in any proceeding.
Enforcement
Fortunately for employers, the law is enforceable only by the Attorney General and does not include a private right of action on behalf of aggrieved employees or applicants. This is significant, as other states that have recently expanded pay transparency requirements, including Washington state, have already seen a swell of private lawsuits based on those new requirements, In enforcing the Massachusetts law, the Attorney General's Office may seek declaratory or injunctive relief and impose fines for failing to submit EEO reports or failing to post or provide pay range information as required. However, in another bright spot for employers, a first offense for a violation of either the new law's pay transparency requirements or data reporting requirements is subject only to a warning under the statute.
The Attorney General has the authority to impose the following fines:
- Second offenses are subject to a fine of not more than $500.
- Third offenses are subject to a fine of not more than $1,000.
- Fourth or subsequent offenses are subject to civil fines of $7,500 to $25,000 per violation, depending on the circumstances.
The current bill states that for enforcement purposes "an offense shall include 1 or more job postings for positions made by the same employer during a 48-hour period." Accordingly, each posting made within a 48-hour period will not be considered a separate offense. This is particularly helpful to large employers who often have multiple job postings at any given time. In addition, to avoid any doubt about the Legislature's intent to avoid creating onerous litigation under the statute, the new law specifically states that violations are not subject to treble damages under the Massachusetts Wage Act.
Next Steps
Now that the statute is on the cusp of becoming law, employers should develop a compliance strategy for the Commonwealth's new pay transparency requirements and their impacts on the workplace. This may involve developing a more rigorous salary band architecture or similar structure for ensuring a consistent approach to setting pay for a given role, along with a review of an employers' current distribution of salaries across employee populations. From an employee relations perspective, employers may want to develop a communication strategy that addresses these and similar issues, as employers begin to broadly distribute pay range information for the first time. Employers with employees in other states that have adopted pay transparency requirements should also consider whether they need to harmonize an approach to pay transparency across multiple jurisdictions. Finally, employers should review their EEO-1 filing process to ensure that they are prepared to submit fully completed forms by the February 1 deadline.
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