Understanding the Massachusetts Pay Transparency Law: Key Dates and Details

In a significant move towards wage equity and transparency, Massachusetts has passed the Frances Perkins Workplace Equity Act, commonly referred to as the Massachusetts Pay Transparency Law. This legislation, signed into law by the Massachusetts governor on July 31, 2024, marks Massachusetts as the latest state to mandate salary disclosures in job postings, aiming to address pay disparities across gender and racial lines. Here’s what you need to know about this new law, including crucial dates for compliance.

What is the Massachusetts Pay Transparency Law?

The Massachusetts Pay Transparency Law requires employers with 25 or more employees in the Commonwealth to disclose salary ranges in all job postings. This law encompasses both internal and external recruitment, whether the posting is made by the employer or a third-party recruiter. Here’s a breakdown of the key components:

• Salary Range Disclosure: Employers must list the “pay range” for each position, defined as the annual salary or hourly wage range they reasonably expect to pay for that role at the time of posting.
• No Disclosure of Additional Compensation: Unlike some states, Massachusetts’ law does not mandate the disclosure of bonuses, commissions, or benefits.
• Applicant and Employee Rights: Current employees and job applicants have the right to request pay range information for specific positions.

Important Dates for Compliance

• Effective Date for Pay Disclosure: The requirements for salary transparency in job postings will take effect on October 29, 2025.
• First Annual EEO and Pay Data Submission: Employers with 100 or more employees in Massachusetts must submit their first round of Equal Employment Opportunity (EEO) and pay data reports by February 1, 2025. Subsequent submissions are due annually by this date.

Who is Affected?

• Small to Medium-Sized Enterprises: Businesses with 25 or more employees must comply with pay range disclosures.
• Larger Employers: Those with 100 or more employees are subject to both pay transparency and annual wage data reporting.

Enforcement and Penalties

• Enforcement: The Massachusetts Attorney General has exclusive jurisdiction to enforce this law, with no private right of action for individuals.
• Penalties:
  • First violation: Warning
  • Second violation: Fine up to $500
  • Third violation: Fine up to $1,000
  • Fourth and subsequent violations: Fines ranging from $7,500 to $25,000 based on the circumstances.

• Review Compensation Practices: Employers should audit their current compensation structures to ensure they can accurately disclose pay ranges.
• Policy Updates: Update internal policies regarding salary disclosures during hiring, promotions, and upon employee requests.
• Training: Train HR and hiring managers on the new legal obligations to avoid inadvertent non-compliance.
• Systematic Pay Analysis: Conduct or update pay equity analyses to identify and rectify any disparities before the law’s implementation.

The Broader Impact

This legislation not only aims to close wage gaps but also enhances Massachusetts’ appeal to job seekers by helping to create a transparent job market.

The Massachusetts Pay Transparency Law requires employers to rethink how they communicate compensation. By understanding and preparing for these changes, businesses can ensure compliance, attract better talent, and contribute to a fairer workforce environment. Keep these key dates in mind and start your preparation early to navigate this new legal landscape smoothly.