Massachusetts’ Salary Range Transparency Law: Key Requirements for Employers

Massachusetts Governor Maura Healey signed into law An Act Relative to Salary Range Transparency (Chapter 141 of the Acts of 2024) on July 31, 2024. This law increases wage transparency requirements for employers with 25 or more employees. The law's provisions will roll out in stages starting in 2025. Below is an overview of the law’s key aspects and what Massachusetts businesses need to know to prepare.

Pay Range Disclosure

The first aspect of the new law to consider is the pay range disclosure requirement. This requirement begins in October 2025 and applies to public and private employers with 25 or more employees in Massachusetts. The law mandates that covered employers disclose salary or hourly wage ranges in the following scenarios:

• Job Postings: Employers must include the pay range for each job opening, whether the posting is made directly by the employer or through a third party.
• Promotions and Transfers: Employers must provide the corresponding pay range when offering an existing employee a promotion or a transfer to a position with new responsibilities.
• On Request: Employers must provide the pay range to applicants and current employees upon request.

Importantly, the new law does not require employers to disclose benefits or other forms of compensation, as some other states do. When determining a pay range for a position, the range must be set in good faith and reflect what the employer expects to pay for the role when the position is posted.

Filing Wage Data

Beginning in February 2025, Massachusetts employers with 100 or more employees must disclose pay ranges in job postings and submit detailed wage data to the state. This requirement leverages existing federal reporting standards from the Equal Employment Opportunity Commission (EEOC), such as the EEO-1 form, to gather wage and demographic data categorized by race, sex, and job category.

• Reporting Deadlines: The first reports must be submitted by February 1, 2025. Subsequent filings are due annually or every other year, depending on the type of report required.
• Public Aggregated Reports: While individual employer wage data reports will not constitute a public record, the state will publish aggregated wage and workforce data by industry on the Department of Labor and Workforce Development's website by July 1 of each year.

Enforcement and Penalties

The law grants the Massachusetts Attorney General’s office exclusive authority to enforce its provisions. Employers found in violation of the law will face the following penalties:

• First offense: A warning
• Second offense: A fine of up to $500
• Third offense: A fine of up to $1,000
• Subsequent offenses: Fines that escalate per Massachusetts labor laws, potentially reaching up to $25,000.

For the first two years of the law’s implementation, employers will have a two-day grace period to correct violations without facing penalties.

Anti-Retaliation

The new law also includes provisions to protect employees and applicants from retaliation or discrimination for requesting pay range information. Employers cannot retaliate against individuals who exercise their right to inquire about compensation details.

Practical Considerations for Employers

Massachusetts joins a growing number of states that have implemented wage transparency laws to reduce gender, racial, and other wage disparities in the workplace. Similar laws exist in several other states (CA, CO, HI, IL, MD, MN, NY, VT, WA & D.C.).

While some states (CT, NV, & RI) require salary disclosures only during the hiring process, Massachusetts is part of a trend that mandates disclosure at the job posting stage.

As Massachusetts employers prepare to comply with the law, here are key actions to consider:

• Review Job Postings: Ensure that all job postings, internally or externally, include the required pay range information.
• Develop Pay Ranges for Positions: If you haven’t already, consider developing pay ranges for each position in your workforce.
• Conduct Pay Equity Audits: Employers should proactively review their pay practices to identify discrepancies with newly developed pay ranges. A pay equity audit will also help companies comply with the Massachusetts Equal Pay Act, which prohibits wage discrimination based on gender and other factors. Additionally, an appropriate pay equity audit conducted within three years before any Equal Pay Act lawsuit is filed gives employers an affirmative defense and protects them from liability.[1]
• Prepare for Data Reporting: Employers subject to the EEO-1 or other federal reporting requirements should begin gathering and preparing the necessary wage and demographic data for state submission in February 2025.

Potential Challenges and Considerations

While the law aims to foster pay equity, it also introduces potential challenges for employers. The balance between attracting top talent with competitive pay ranges and managing internal pay equity can be tricky. Some employers may be concerned that disclosing pay ranges publicly could cause dissatisfaction among existing employees or impact their ability to hire top candidates.

Employers may also have difficulty setting appropriate pay ranges, as the law does not specify exactly what constitutes a “reasonable” range.

Conclusion: Preparing for Compliance

With the implementation dates of October 2025 for pay range disclosures and February 2025 for wage data reporting, businesses have time to prepare. Still, they should start taking steps now to ensure compliance. Companies should review their compensation practices, update job postings, and conduct pay equity audits to avoid future issues.

Proactively addressing these requirements will help minimize disruptions and risks, allowing companies to meet the law’s obligations without compromising their operational flexibility or internal pay structures. By taking these steps, employers can avoid potential legal issues and fines while maintaining a competitive and compliant workforce. For more information concerning the Massachusetts Pay Transparency law or other wage and hour obligations your company may have, contact a member of Verrill’s Employment and Labor Practice Group.