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. The Massachusetts Attorney General’s office will hold exclusive jurisdiction to enforce the law, meaning there will not be a private right of action for employees. Violations of the law will result in potential fines, beginning with a simple warning and escalating based on repeated offenses.
How to Comply With the New Law
For employers, this law necessitates a review of existing and future job postings, and a possible overhaul of wage reporting practices. Employers in Massachusetts will need to consider appropriate pay ranges for their job positions and communicate those transparently to avoid any possible surprises to employees. Employers should be particularly mindful of the February 1, 2025 effective date to submit pay data reports to the state, given the remainder of the law’s provisions do not go into effect until July 31, 2025.
The new law also serves as a reminder to employers of Massachusetts’ Equal Pay Act, which was enacted in 2018 and prohibits differences in employee pay for comparable work. The EPA provides a complete defense for any employer that, within the previous three years and before an action is filed against it, has conducted a good faith, reasonable self-evaluation of its pay practices. Sheppard Mullin regularly conducts audits for its clients so that they remain in compliance with the EPA and can take advantage of the EPA’s complete defense provision. These audits will be equally helpful in complying with Massachusetts’ new pay transparency law. Please contact us to discuss a possible audit and to ensure your job postings, pay ranges, and employee data reporting comply with the new law.