Massachusetts now joins a growing list of states and other localities with pay transparency laws.

On July 31, 2024, Massachusetts Governor Maura Healey signed into law Bill H.4890. The Bill contains new pay transparency and wage reporting requirements applicable to certain employers with employees in Massachusetts. The law requires employers with 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 law takes effect July 31, 2025.

New Salary Range Requirements

The pay transparency provisions of the new legislation require public and private employers with at least 25 employees in Massachusetts to:

1. Disclose the pay range of an employment position in a posting of such position (including through an outside recruiter);
2. Provide the pay range of an employment position to an employee who is offered a promotion or transfers to a new position with different job responsibilities[1]; and
3. Provide a pay range for an employment position to a person who holds that position or an applicant for such position at the person’s request.

The “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. “Posting” encompasses “any advertisement or job posting intended to recruit job applicants for a particular and specific employment position, including, but not limited to, recruitment done directly by a covered employer or indirectly through a third party.”

New Reporting Obligations

The law also includes a provision requiring employers with at least 100 employees in Massachusetts at any time during the prior calendar year to submit an annual Equal Employment Opportunity (“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 requirement does not necessarily create new additional paperwork for private employers because submission of a properly completed federal EEO-1 Employer Information Report will satisfy this filing requirement.

Specifically:

1. Copies of EEO-1 data reports (Employer Information Reports) for the prior year must be submitted annually to the extent the employer is subject to EEO-1 data reporting requirements.
2. Copies of EEO-3 (i.e., a local union’s Local Union Reports) or EEO-5 (Elementary-Secondary Staff Information Reports) data reports for the most recent filing period must be submitted every odd year to the extent the employer is subject to EEO-3 or EEO-5 data reporting requirements.
3. Copies of EEO-4 data reports (i.e., State and Local Governmental Information Reports) for the most recent filing period must be submitted every even year to the extent the employer is subject to EEO-4 data reporting requirements

The deadline for all such submissions to the Secretary of the Commonwealth is February 1 of the applicable year. 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. The individual employer reports will not be considered “public records” subject to disclosure under the Massachusetts Public Records Law.

Covered employers must submit their first round of EEO and pay data to the Commonwealth by February 1, 2025.

No Retaliation

The new law prohibits an employer from firing or otherwise retaliating or discriminating against an employee or job applicant if such person seeks to enforce their rights under the legislation and has:

1. taken action to enforce the rights provided by the law;
2. made a complaint to their employer, the employer’s agent, or the Massachusetts Attorney General regarding an alleged violation of the law;
3. instituted a proceeding under the law; or
4. testified or is about to testify in any proceeding.

Enforcement & Penalties

Fortunately for covered employers, the law does not include a private right of action on behalf of aggrieved employees or applicants. The Massachusetts Attorney General has exclusive jurisdiction to enforce the law and may obtain injunctive or declaratory relief in such enforcement. Employers who violate this law will be given a warning for the first offense, and then the Attorney General has the authority to impose the following fines:

• A second offense is subject to a fine of not more than $500.
• A third offense is subject to a fine of not more than $1,000.
• A fourth or subsequent offense is subject to civil fines of between $7,500 and $25,000 per violation, depending on the circumstances.

Each posting made within a 48-hour period will not be considered a separate offense. This is helpful for larger employers who make multiple job postings at once. The new law also specifically states that violations are not subject to treble damages under the Massachusetts Wage Act.

What to Do Next?

Now that Governor Healey has signed the Bill into law, the pay transparency requirements will take effect one year after her signature, which is on July 31, 2025. The first EEO-1, EEO-3, and EEO-5 data report requirements must be submitted to the Secretary of the Commonwealth by February 1, 2025, and the first EEO-4 reports must be submitted by February 1, 2026.

Most employers have a year to develop a compliance strategy for the Commonwealth’s new pay transparency requirements and their impact on the workplace. Employers should assess whether the law currently applies (or may apply) to them based on how many employees they have in Massachusetts. If the law may apply, employers should implement procedures for ensuring a consistent approach to setting pay for a given role, along with a review of their current distribution of salaries across employee populations. Employers with employees in other states that have adopted pay transparency requirements should also consider whether they need to develop a corresponding approach to pay transparency across multiple jurisdictions.

[1] The law does not require a covered employer to post publicly the position when offering a promotion or transfer to an employee, rather the employer must internally provide the pay range to the employee who is eligible or subject to the transfer or promotion.