Benefits and Compensation

What Employers Need to Know About Massachusetts’ New Pay Transparency Law

Massachusetts joined a growing list of states with pay transparency laws when Governor Maura Healy signed “An Act Relative to Salary Range Transparency” into law. The law, which will take effect in stages in 2025, requires many Massachusetts employers to disclose salary/pay ranges in all job postings and to file certain wage data/information with the Commonwealth of Massachusetts. The law also protects a worker’s right to request salary/pay range information. The law is aimed at eliminating gender, racial, and other wage disparities, according to the Office of Labor and Workforce Development. Here’s what employers need to know.

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Salary Ranges

The law requires employers with 25 or more employees to disclose pay range information to both applicants and employees in a number of circumstances.

First, you must include the pay range, which is the “annual salary or hourly wage range that the covered employer reasonably and in good faith expects to pay for that position at that time,” in all job postings. These include “any advertisement or job posting intended to recruit job applicants for a particular and specific . . . position,” regardless of whether you recruit directly or use a third party.

Additionally, you must provide pay range information internally to any employee who is offered a promotion or transfer to a new position. Lastly, upon request, you must provide pay range information to applicants for the position(s) they applied to and employees for the positions they hold. This portion of the law is effective July 31, 2025.

The statute also prohibits you from retaliating against any employee or applicant who requests pay range information.

Filing Wage Reports

In addition to the new pay disclosure obligations, employers with 100 or more employees at any time during the calendar year that are subject to the federal EEO-1, EEO-3, EEO-4, or EEO-5 reporting requirements will be required to file certain wage data and demographic information to the commonwealth on an annual or every-other-year basis. EEO reports contain workforce demographic and pay data categorized by race, ethnicity, sex, and job category.

Beginning on February 1, 2025, employers subject to the EEO-1 reporting requirements will need to file a copy of their EEO-1 data report annually with the commonwealth. Employers subject to the EEO-3 and EEO-5 reporting requirements will need to file a copy of those reports with the commonwealth every other year beginning on February 1, 2025. Likewise, employers subject to the EEO-4 reporting requirements will need to file a copy of those reports every other year beginning on February 1, 2026.

The reports won’t be public records under Massachusetts law. In other words, members of the public won’t be able to request and receive copies of these records. The commonwealth, however, will use the data to publish aggregate wage and workforce data on the Department of Labor and Workforce Development’s website no later than July 1 of each year beginning in 2025. These aggregate reports will be broken down by industry.

Next Steps

Although the law’s effective dates may seem far away, you should start preparing now to comply with the deadlines. If you haven’t already, you need to start developing pay ranges for each position in your workforce and may want to consider conducting a pay equity audit to ensure there aren’t any pay disparities, as employees will now be able to request and discuss this information in the workplace.

There are other important benefits to conducting a pay equity audit under the Massachusetts Equal Pay Act. Specifically, an appropriate pay equity audit conducted in the three-year period before any Equal Pay Act lawsuit is filed gives employers an affirmative defense in the matter and protects them from liability.

If you plan to conduct a pay equity audit, you should strongly consider working with your employment counsel to preserve the attorney-client privilege, which may prevent certain information from being disclosed in subsequent litigation.

If you fail to comply with the new law’s requirements, you can be subject to warnings (first offense) and fines for each additional offence. If you have any questions, you should work with your labor and employment counsel to prepare for the new requirements.

Amelia J. Holstrom is a partner at the firm Skoler, Abbott & Presser, P.C., in Springfield, Massachusetts, and can be reached at aholstrom@skoler-abbott.com.

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