Massachusetts Joins Flood of States Passing Pay Transparency Laws

By Robert G. Brody and William C. Collins

On July 31, 2024, Massachusetts Governor Maura Healey signed the Frances Perkins Workplace Equity Act into law aiming to improve pay transparency and curb wage disparities. Massachusetts is the 5th state to pass pay transparency legislation in 2024  joining Hawaii, Illinois, Maryland, Minnesota, and Vermont. This trend began in 2019 with Colorado. Since then, California, Connecticut, Maryland, Nevada, New York, Rhode Island, and Washington have all passed similar measures.

The new law will come into effect July 31, 2025, and mandates employers with 25 or more employees in Massachusetts include pay ranges in job postings, including internal promotion and transfer postings. The disclosure requirements do not extend to additional compensation, such as bonuses or benefits. The posting must include an annual salary or hourly range which the employer “reasonably and in good faith expects to pay for such position at that time.” Furthermore, employees and applicants may request pay range information for specific positions. Any retaliation or discrimination against an employee or applicant for reporting or taking any action to enforce the law is unlawful retaliation.

There are further reporting requirements for Massachusetts employers with at least 100 employees beginning February 1, 2025. Such employers will be required to file an annual report to the Commonwealth including data on demographics and pay by race, ethnicity, sex, and job category. Unions, state and local governments, and school systems must file these reports every other year. Private employers may submit their annual federal Equal Employment opportunity Commission (EEO-1) Report to meet the reporting requirement. The Massachusetts Department of Labor will publish this data online giving insight into wage disparities but will maintain the anonymity of the employer.

Fortunately for employers, there is no private right of action; applicants or employees will not be able to sue employers for violations. However, the law will be enforced by the Massachusetts Attorney General. A first violation results in a warning, a second results in a fine not exceeding $500, and a third warrants a fine not exceeding $1,000. Any further offenses will produce harsher penalties with fines up to $25,000. If a violation is not corrected within 48 hours, it will be considered a separate offence. The first year the law is in effect, employers will be given a period of 2 business days to correct a problem without being fined.

To prepare for implementation, employers should mark their calendars now to evaluate their job postings in early July 2025 to ensure they include the required pay ranges and train your management team on your new obligation to disclose this information if requested by an employee. Regarding the pay data disclosure requirement, starting in 2025, covered employers should file a copy of your EEO-1 with both the EEOC and the state. For employers not operating in Massachusetts keep an eye on your own state’s pay transparency requirements as similar legislation continues to sweep the nation.

Brody and Associates (info@brodyandassociates.com or 203-454-0560) regularly advises management on complying with the latest local, state and federal employment laws.