The Massachusetts legislature has enacted a new law that mandates pay transparency and reporting requirements for certain employers. The law, titled “An Act Relative to Salary Range Transparency,” takes effect as early as February 1, 2025, for reporting requirements and October 29, 2025, for salary range disclosure. [1]
The pay transparency law is intended to improve data collection on gender and racial pay gaps, aid applicants in negotiating better salaries, promote equity in the workplace, increase efficiency in the hiring process for all parties involved, increase job satisfaction and attract talent and diversity to Massachusetts.[2] This is accomplished through two primary avenues: (i) pay range disclosures, and (ii) reporting requirements.
Salary Range Disclosure
Starting on October 29, 2025, both public and private employers with 25 or more employees in the Commonwealth of Massachusetts will be required to disclose pay ranges in job postings, provide the pay range of a position to current employees who are offered a promotion or transfer to a new position and, on request, provide the pay range to current employees or applicants for open positions.
“Pay range” is defined as the annual salary range or hourly wage range that an employer reasonably and in good faith expects to pay for the position. At this time, the pay range does not include bonuses, commissions, deferred compensation, stock options or any other benefits provided.
Penalties for noncompliance are as follows: a warning for the first offense, up to a $500 fine for the second offense, up to a $1,000 fine for the third offense and more serious penalties, including a fine up to $25,000, for the fourth offense. For the first two years, employers will be given two business days after notice of a violation to cure any defect before a fine is imposed.
There is no private cause of action for noncompliance. The attorney general has exclusive jurisdiction to enforce these requirements. However, there is a prohibition against retaliation and discrimination against employees or applicants who exercise their rights under the law, aid in filing a complaint, institute a proceeding or testify in a proceeding.
Reporting Requirements
Effective February 1, 2025, employers with 100 or more employees in the Commonwealth of Massachusetts at any time during the prior calendar year and subject to the federal filing requirements of a wage data report, shall report aggregated wage data by race, ethnicity, sex and job category on an annual basis.
This is not expected to create a substantial additional burden on employers because the same form filed with the federal Equal Employment Opportunity Commission (for most private employers, an EEO-1) will be accepted by the Massachusetts Secretary of State. Local Union Reports (EEO-3), state and local government reports (EEO-4) and Elementary-Secondary Staff Information Reports (EEO-5) will be due every other year.
Individual reports will not become public records. Instead, the data will be aggregated by industry sector and published on a yearly basis.
What Can My Business Do to Prepare?
If your business is subject to any of the above requirements, you should:
- Ensure that all hiring personnel are informed of the new law and its requirements.
- Implement data management practices to keep track of the required information.
- Adopt procedures to ensure compliance with pay range disclosures.
- Develop a line of communication to ensure requests for pay range information are adequately addressed.
If you have any questions about the Massachusetts pay transparency law, our business lawyers are ready to provide guidance. Call us to schedule an appointment.
[1] https://www.mass.gov/doc/h4890-signing/download
[2] https://www.mass.gov/news/the-benefits-of-wage-transparency