/>iIn an era where pay equity and transparency are becoming increasingly important, Massachusetts has taken a significant step with the enactment of House Bill 4890 (HB 4890), the Commonwealth’s new pay transparency law, which expands its previously enacted Massachusetts Equal Pay Act. This legislation, which will take effect July 31, 2025, represents a major shift in how employers and employees interact when it comes to salary discussions. Here's what you need to know about this landmark law and its implications.
What is HB 4890?
HB 4890, officially known as the "An Act Relative to Salary Range Transparency Act” (the “Act”), is designed to promote salary transparency and combat pay discrimination within Massachusetts. The law requires employers to provide more information about pay ranges and reporting wage information in the aggregate, ultimately aiming to close the gender pay gap and ensure fair compensation practices.
Key Provisions of the Law
(1) Disclosure of Salary Ranges:
One of the most impactful aspects of HB 4890 is the requirement for employers to disclose salary ranges in job postings. This means that an employer with 25 or more employees must include a clear and specific range of compensation that potential candidates can expect in its job postings.
A posting is defined as "any advertisement or job posting intended to recruit job applicants for a particular and specific employment position,” which includes postings made through recruiters or a third party. Pay range is defined as "the salary range or hourly range that the covered employer reasonably and in good faith expects to pay" for the position at the time of posting. Notably absent from this definition, however, is other forms of non-salary or hourly-rate compensation, such as bonuses, commissions, or other benefits.
(2) Wage Data Reporting:
Employers with 100 or more employees in Massachusetts at any time during the prior calendar year (and who are subject to federal wage data reporting requirements) much submit employee demographics and a wage data report to the Secretary of the Commonwealth. The submission can be in the form of federal EEO reports, but with the inclusion of wage data. If this requirement sounds familiar, it is similar to the wage reporting required by California and Illinois.
(3) Protection from Retaliation:
The Act prohibits retaliation against an employee who has (a) engaged in conduct protected by the Act, (b) made a complaint, (c) instituted, or caused to be instituted, a proceeding under the Act, or (d) testified or is about to testify in any such proceedings.
(4) Penalties
Except for claims of discrimination or retaliation, there is no private right of action and the Massachusetts Attorney General is the only party able to enforce the Act. The Act provides penalties for offenses as follows:
- First Offense: warning;
- Second Offense: no more than $500;
- Third Offense: no more than $1,000;
- Fourth or Subsequent Offense: $7,500 to $25,000.
The Act states that “an offense shall include 1 or more job postings for positions made by the same employer during a 48-hour period.” Fortunately for employers, treble damages under the Massachusetts Wage Act are not available violations of the Act.
Interestingly, the employee anti-discrimination and anti-retaliation provision of the Act is not included within the provision of the Act otherwise providing the Attorney General with exclusive jurisdiction over enforcement. This structure creates uncertainty about the legislature’s intent. Although it is likely the case that the Act merely acknowledges that employees may seek to enforce discrimination and retaliation claims via complaining to the Attorney General’s Office and participating in its enforcement actions, it is conceivable plaintiffs’ attorneys will argue that employees have an implied private right of action under this statute to bring complaints of discrimination and retaliation under the Act in court, including under the Wage Act.
To be clear, there is no affirmative evidence in the Act itself of a private right of action existing as to any potential violation of the Act. Because the private right of action provided for in M.G.L. c. 149, which is embodied in § 150, has not been amended to include § 150F within its ambit, the better interpretation is that only the Attorney General will have enforcement power over this section pursuant to G. L. c. 149, § 2, even if not expressly stated here. Moreover, in a press release, the Attorney General noted that “employees will receive protections against retaliation for asking for salary ranges when applying for a job or promotion,” which seemingly suggests that the Attorney General will provide such protections, rather than some other source. Press Release, Massachusetts Office of the Attorney General, Governor Healey Signs Wage Equity Legislation. More information may be provided during the Attorney General’s forthcoming public awareness campaign, as required by § 8 of the Act. Regardless, any such claims employees may have through the Attorney General or otherwise would be subject to the Act’s prohibition of treble damages.
Impact on Employers
For employers, the Act introduces several new responsibilities.
Companies will need to update their hiring practices to comply with the new salary disclosure requirements and may need to adjust their internal pay structures. This could involve re-evaluating job descriptions, revising compensation strategies, and investing in training to ensure compliance with the new regulations. Employers should conduct regular pay equity analysis with outside counsel to understand potential liability in its compensation practices. Doing so will also allow employers to take advantage of the safe harbor provision under the Massachusetts Equal Pay Act (“MEPA”).
More specifically, pursuant to the MEPA, which took effect July 1, 2018, employers who (1) conduct a good-faith, reasonable audit of its pay system and practices, within three years of an action being filed, and (2) made reasonable progress in eliminating any prohibited gender- or sex-based wage disparities uncovered as a result of the audit may assert an affirmative defense to any claims under the MEPA and bars liquidated damages.
While these changes may require an initial investment of time and resources, the long-term benefits include a more transparent and equitable workplace. By proactively addressing pay equity and being transparent about compensation, employers can enhance their reputation, attract top talent, and reduce turnover. Moreover, properly conducting audits under the MEPA every three years (and working to resolve any issues) will help provide an affirmative defense to employers in the event of a legal challenge.
Looking Ahead
The Act represents the next falling domino in an area where states are stepping in to promote greater pay equity and transparency.
As the law takes effect, employers will need to navigate these changes and adapt to the new landscape of compensation practices. By embracing transparency and establishing wage reporting requirements, Massachusetts is the latest state in a growing trend to set a precedent for fair pay practices that could influence other states and industries in the future.
For employers, staying informed about the specifics of the Act, its interplay with existing laws like the MEPA, and consulting with counsel will be essential to ensuring compliance. As more and more differing standards emerge, it is important employers work with experts in this space to stay compliant and properly approach their compliance in this space.
