Preparing for Massachusetts' Pay Transparency Law

Starting October 29, Massachusetts’s pay transparency law will require employers with 25 or more Massachusetts employees to disclose wage ranges in all job postings to applicants and current employees upon request.

Covered Employer

Employers with at least 25 employees whose primary place of work was in Massachusetts during the prior calendar year are subject to the law’s pay transparency requirements.

An employee’s “primary place of work” means where the employee performs most of their work.

Counting Employees

To determine whether they meet the 25-employee threshold, employers must count all individuals who performed services for wages, remuneration, or other compensation, including full-time, part-time, and seasonal workers, whose primary place of work is in Massachusetts.

This includes (1) remote or hybrid employees located in Massachusetts who work for an out-of-state employer, and (2) out-of-state remote or hybrid employees whose primary place of work is Massachusetts (e.g., they report to or are assigned a Massachusetts worksite).

Employers should calculate their headcount once a year by averaging the number of employees on the payroll across all pay periods within that same year.

Pay Range Disclosure Requirements

Employers must disclose the pay range in any advertisement or job posting for any position where the primary place of work is in Massachusetts. Similar to employee headcount, this includes any positions that can be performed remotely by employees whose primary place of work is Massachusetts, either because they are located in Massachusetts or are located out of state but are assigned or report to a Massachusetts worksite.

Employers also must disclose the pay range of such positions:

• To employees who are offered promotions or transfers to new positions with different job responsibilities, and

• On request, to an employee who already holds an employment position with the organization or an applicant for such a position, even if there is no vacancy in that role. 

Pay Range

When stating the minimum and maximum annual salary or hourly wage for a position, the range may extend from the lowest to the highest annual salary or hourly wage the employer “reasonably and in good faith” believes it would pay for the advertised job, promotion, or transfer opportunity at the time of the posting.

The commission range the employer reasonably expects to pay for commission-based positions must be included in the job posting.

The law does not require the posting to contain bonus or benefits information.

Pay Reporting Obligations

In addition to the pay disclosure obligations, employers covered under the law also must comply with pay reporting requirements. Employers who are required to submit equal EEO reports to the EEOC must also submit them to the Secretary of the Commonwealth.

Consequences for Non-Compliance

Covered employers who do not comply with the law or retaliate against employees for seeking to exercise their rights under the law can be subject to the following penalties:

• Warning for the first offense.

• A fine of up to $500 for the second offense;

• A fine of up to $1,000 for the third offense; and

• Additional penalties for the fourth offense and subsequent offenses.

The Attorney General enforces the law, and there is no private right of action under it. However, the pay data disclosed under the law can provide employees with support for a wage-based discrimination claim. Employees may also bring claims under the Massachusetts Equal Pay Act.

Until 29 October 2027, employers receiving notice from the Attorney General of any violation will have a two-business-day grace period to correct and avoid a fine.

Recommendations 

• Calculate the number of employees whose primary place of employment is in Massachusetts to determine whether the company is covered under the pay transparency law.

• Conduct a pay equity audit and identify and correct any pay disparities. The increased availability of pay information will likely increase the risk of claims under Massachusetts’ Equal Pay Law. Employers facing such claims are protected if they have self-evaluated their pay practices and taken meaningful steps to eliminate wage disparities before claims.

• Use the results of the pay equity audit or a pay analysis and market research to develop pay ranges for all positions, and ensure those ranges are what is expected to be paid for the role.

• Update job postings for Massachusetts-based roles to include pay ranges and ensure the job postings accurately reflect the job duties and educational and experience requirements of the role.

• Audit and, if necessary, update job descriptions and titles to ensure they accurately reflect the described positions.

• Implement policies regarding how pay ranges are set and adjusted, how the company will address requests for pay range disclosures, and anti-retaliation provisions.

• Set a schedule to analyze/audit and update pay ranges.

• Train staff and managers on applicable policies and laws, including (i) how to discuss pay ranges with candidates and employees, (ii) how to respond to pay range requests from existing employees, (iii) avoiding asking for prior salary history until after a job offer is made, and (iv) refraining from retaliation or bias in pay discussions.