On July 31, 2024, Massachusetts took a significant step toward pay equity when Governor Maura Healey signed a new Pay Transparency Law into effect. This legislation, aimed at promoting fairness and transparency in compensation practices, is part of a broader nationwide trend addressing wage disparities and discriminatory practices across various industries. Here’s what Massachusetts employees and employers need to know about the new law and how it will impact hiring and internal processes.
Key Requirements of the Law
Starting on July 31, 2025, employers with 25 or more employees in Massachusetts will be required to:
Disclose Salary Ranges in Job Postings: Any job advertisement or posting must now include a salary or wage range that the employer reasonably expects to offer for the position. This requirement applies to job postings made directly by the employer or indirectly through third-party platforms like recruiters.
Provide Pay Range Information for Promotions and Transfers: Employers must also disclose salary ranges when offering an employee a promotion or a transfer to a new position. This transparency ensures that employees have clear visibility into their potential earnings as they grow within the company.
Respond to Pay Range Requests: Current employees, as well as applicants for new roles within the organization, have the right to request and receive information about the salary range for their position. This step empowers employees to have more informed discussions about their compensation and career trajectory.
Refrain from Retaliation: Employers may not punish individuals who attempt to enforce their rights under the new law or make a complaint regarding violations of the new law.
Additionally, starting on February 1, 2025, employers with 100 or more employees in Massachusetts will be required to:
Adhere to Certain Reporting Requirements: Companies with 100 or more employees will need to provide information to the Federal Equal Opportunity Employment Commission (“EEOC”).
The Broader Context: Why Pay Transparency Matters
This law aligns with growing national efforts to address wage gaps, particularly those that disproportionately affect women and minorities. Pay transparency is seen as a vital tool for achieving pay equity by removing ambiguity in salary negotiations and helping to close wage gaps over time.
Even smaller Massachusetts companies with fewer than 25 employees have a legal responsibility not to discriminate against their employees. Companies will need to remain in compliance with more established laws, such as the Massachusetts Equal Pay Act and Ch, 151B, Massachusetts’ anti-discrimination statute, as well as federal law. A pay transparency law will further enable Massachusetts to combat discriminatory practices. In recent years, other states like Colorado and California have passed similar laws, underscoring the importance of clear compensation information in fostering a more equitable work environment.
Pay transparency laws are uniquely situated to combat discrimination because they do not require proof of intent to discriminate, or that disparate treatment occurred against a protected group.
Enforcement and Penalties
While the Massachusetts Attorney General will be responsible for enforcing the law, the first year of implementation will allow for corrections without penalty. Employers who violate the law after this grace period, however, could face civil fines, starting at $500 for a second offense and increasing with subsequent violations. Although this law does not have a private right of action, employees who believe an employer has violated the law may have recourse under other state and federal laws that allow individuals to sue for damages.
Looking Ahead
Massachusetts’ Pay Transparency Law is a proactive measure to ensure wage fairness and improve workplace equity. Employers who take the necessary steps to comply will not only avoid penalties but will also foster a culture of trust and fairness within their organizations. As this law is part of a broader movement across the U.S., companies operating in multiple states should monitor similar developments in other jurisdictions to stay ahead of compliance requirements.
At Greene and Hafer, our attorneys are well-versed in employment law and can provide guidance on this new pay transparency law. Located in Boston, Massachusetts, Greene and Hafer attorneys have extensive experience handling employment cases. To schedule an appointment with an experienced lawyer, contact our office.
