- Massachusetts voting on pay transparency legislation. Massachusetts is the latest state to vote on pay transparency legislation and is set to join a growing list with laws in place.
- Massachusetts law specifics. The law does not specify whether other forms of compensation such as bonuses, commissions or other forms of equity or benefits must be included in job postings.
- Additional reporting required. Under Massachusetts’ proposed legislation, employers with 100 or more full-time employees in Massachusetts that are subject to EEO-1 filing requirements must provide an industry-based “aggregate wage data report” as a supplement to their EEO-1 report.
- Compliance is a key consideration. Employers should pay attention to the new laws and how to best comply with what promises to be a complex legal scenario in its early stages.
Massachusetts is expected to become the next state to pass pay transparency legislation, joining a growing list that either have a law in place or have recently passed legislation.
The state House recently voted 148-8 in favor of Bill 4109, which would require businesses that employ 25 or more employees in Massachusetts to disclose the salary range or hourly wage range in job postings. If the state Senate follows suit, as expected, Gov. Maura Healey would still need to sign the legislation for it to become law.
So far eight states (California, Colorado, Connecticut, Maryland, Nevada, New York, Rhode Island and Washington, along with several municipalities) have pay transparency laws. Hawaii and Illinois recently passed legislation that is set to take effect in 2024 and 2025, respectively.
Resource: Pay Equity Laws by State — Are You in Compliance?
According to data from the National Women’s Law Center (NWLC), nearly 44.8 million people, or 26.6% of the U.S. labor force, live in a state where employers are required by law to list salary ranges in public job postings.
Massachusetts Law Specifics
Unlike some other existing pay transparency laws, such as those in Colorado and Washington, Massachusetts’ proposed legislation is silent as to whether other forms of compensation — such as bonuses, commissions or other forms of equity or benefits — should be included in such advertisement or posting, according to Monica Snyder Perl, a partner with the Fisher Phillips law firm.
Snyder Perl added that one other differentiator this proposed legislation has from some existing pay transparency laws is the requirement regarding pay data reporting. Under Massachusetts’ proposed legislation, employers with 100 or more full-time employees in Massachusetts that are subject to EEO-1 filing requirements must provide an industry-based “aggregate wage data report” as a supplement to their EEO-1 report.
“The resulting data would then be published by the Executive Office of Labor and Workforce Development on its website,” Snyder Perl said. “If this portion of House Bill 4109 passes, Massachusetts will join a small number of states, such as California and Illinois, who require pay data reporting.”
Joy Rosenquist, of counsel with the Littler Mendelson P.C., an employment law firm, said “pay range” within job postings means the annual salary range or hourly wage range that the employer reasonably and in good faith expects to pay for such position at that time.
This law also defines a “posting” as any advertisement or job posting intended to recruit job applicants for a particular and specific employment position — including recruitment done directly by an employer or indirectly through a third party, she added.
Also, the pay range must be in the posting itself and cannot be satisfied by listing a hyperlink redirecting the applicant, Rosenquist said, adding that the pay scale disclosure requirement applies to promotions and lateral moves within the company as well.
“Finally, the pay scale for an employee’s existing position must be provided to an employee upon request,” she said.
Next Steps
If passed, the bill would go into effect six months after enactment. The penalties for a violation of this bill are a warning for the first offense, a fine up to $500 for the second offense, and $1,000 for a third offense. Subsequent violations carry significantly higher penalties up to $25,000 per each offense.
Denise Visconti, a Littler shareholder, noted that Massachusetts’ provisions are in line with most other states’ wage transparency legislation, the private right of action being a notable exception.
“Many other states have allowed a prospective or existing employee to sue for a violation, but this statute is enforced through the state’s Attorney General’s office only,” she said.
Moving forward in the pay transparency landscape, Visconti said there is a similar law pending in Maine, which Littler expects to be the next state to pass pay transparency legislation.
As a word of caution, Fisher Phillips’ Snyder Perl recommends that employers in Massachusetts should keep a close eye on this proposed legislation and consider partnering with legal counsel to conduct a proactive pay equity audit to get ahead on compliance efforts and confirm equitable wages are being offered.
“Working with legal counsel also ensures that the work is conducted under the attorney-client privilege and, therefore, not discoverable in litigation,” she said.
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