Massachusetts Enacts New Pay Transparency Law

On July 31, 2024, Governor Maura Healey signed into law the Commonwealth of Massachusetts’ first pay transparency law, the Frances Perkins Workplace Equity Act (the Act). The Act requires employers with 25 or more Massachusetts employees to include salary range information in job postings and to provide pay range information to current employees under certain circumstances. The Act further requires private employers with 100 or more Massachusetts employees to submit annual EEO and pay data to the Commonwealth, which will be reported in aggregate by the Massachusetts Executive Office of Labor and Workforce Development.

By enacting a pay transparency law, Massachusetts joins multiple other states with such laws, including California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Minnesota, Nevada, New York, Rhode Island, Vermont and the State of Washington, as well as Washington, D.C. The Act is intended to expand on efforts to advance pay equity, which include the Massachusetts Equal Pay Act, summarized in an earlier client alert, linked here.

When Will the Act Take Effect?

The Act’s pay disclosure requirements will not take effect until July 31, 2025. The Act directs the Attorney General to provide information to covered employers about the pay disclosure requirements on the Attorney General’s website by January 31, 2025. That may include guidance to assist employers in their preparations to comply with the Act. For private employers with more than 100 employees, the first EEO and pay data reporting deadline is February 1, 2025.

How Will the Act Affect Advertising and Job Postings?

Under the Act, private employers with 25 or more Massachusetts employees will be required to include the pay range for a particular position on all job postings. This requirement will apply to “any advertisement or job posting intended to recruit job applicants for a particular and specific employment position,” whether advertised or posted by the employer directly or indirectly through a third party, such as a recruiter.

Covered employers will also be required to provide the pay range for a particular position to any employee who is offered a promotion or a transfer to a new position with different job responsibilities than their current role. Covered employers will be further required to provide pay range information for any existing position upon request to either (i) the employee holding the position or (ii) any applicant for the position.

“Pay range” is defined as the annual salary range or hourly wage range that the employer reasonably and in good faith expects to pay for the position at that time. Unlike pay transparency laws in some other states – such as Colorado, Washington, and Maryland – the Act will not require disclosure of other pay (such as bonuses) or benefits (such as group health plans or vacations).

What New Reporting Requirements Will Apply?

In addition, private employers with 100 or more Massachusetts employees will be required to submit annual EEO and pay data categorized by race, ethnicity, sex, and job category to the Secretary of the Commonwealth by February 1. The submission of a properly completed federal EEO-1 Employer Information Report will satisfy the Commonwealth’s filing requirement. Unions, state and local governments, and elementary and secondary school systems will be required to submit similar information every two years.

The EEO and pay data will be aggregated and published annually on the website of the Massachusetts Executive Office of Labor and Workforce Development by July 1 of each year. The Act makes clear that individual employer EEO reports are not included in the definition of “public records” subject to disclosure under the Massachusetts Public Records Law. Nevertheless, employers should be aware that such records may be discoverable in litigation.

How Will the Act’s Reporting and Disclosure Provisions Be Enforced?

Only the Massachusetts Attorney General may enforce the Act’s disclosure and reporting provisions. Enforcement may take the form of declaratory or injunctive relief, in addition to civil fines. A first offense will be punishable only with a warning. After that, employers found in violation of the Act may be subject to the following civil fines:

• Second offense: not more than $500
• Third offense: not more than $1,000
• Fourth and subsequent offenses: no more than $25,000, depending on the circumstances

For enforcement purposes, the Act defines an offense as “1 or more job postings for positions made by the same employer during a 48-hour period.” By way of example, an employer accused of violating the Act’s disclosure requirements in ten live job postings would be liable for only one offense if all ten postings appeared in the same 48-hour window. This is particularly helpful for larger employers who may regularly maintain multiple job postings at any given time. In addition, the Act explicitly states that violations are not subject to treble damages under the Massachusetts Wage Act.

Finally, the Act allows employers some breathing room to come up to speed with the Act’s requirements: During the first year that the Act is enforceable, employers may cure any violations within 48 hours to avoid fines.

Does the Act Include a Retaliation Provision?

Yes. The Act prohibits retaliation or discrimination against any employee or applicant for making a complaint to an employer, an employer’s agent or the Attorney General, as well as for other actions to enforce rights under the Act.

The members of Goodwin’s Employment Practice are ready to work with clients to assist them in preparing for compliance with the Act.

This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided on the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin or its lawyers. Prior results do not guarantee a similar outcome.