Massachusetts has recently signed a new bill into law. With many employees and job seekers facing wage disparities, Massachusetts is talking steps to combat these issues. Wage transparency can cause anxiety and confusion, making it hard for employees to feel valued and fairly compensated.
In this article, you will learn about the new Massachusetts pay transparency laws. We’ll cover what these laws mean for employers and employees, the steps businesses need to take to comply, and how these changes can help promote fairness in the workplace. At Paper Trails, we understand the fears and headaches small businesses face regarding payroll, HR, and management. We’re here to inform and guide you through these new regulations, helping you manage your team more effectively and equitably.
Understanding Massachusetts Pay Transparency Laws
Massachusetts has taken a significant step towards promoting wage equity by enacting pay transparency laws. Governor Maura Healey signed ‘An Act Relative to Salary Range Transparency (H.4890)‘ into law on July 31, 2024, with the new requirements set to take effect on July 31, 2025. This law mandates that employers disclose salary information in job postings and report pay data to the state. By doing so, Massachusetts joins other states like California, Colorado, and New York, which have implemented similar legislation to combat wage disparities. For more information on your requirements as a Massachusetts employer, check out this article here.
Key Provisions of Massachusetts Pay Transparency Laws
Salary Range Disclosure Requirements
One of the main aspects of the Massachusetts pay transparency laws is the requirement for employers with 25 or more employees to disclose pay ranges. This disclosure must be made in several situations:
- Job Postings: Both internal and external job advertisements must include the pay range. This includes postings by third-party recruiters and even informal social media posts about job openings.
- Promotions and Transfers: When offering a promotion or transfer to an existing employee, employers must provide the pay range for the new position.
- Upon Request: Any employee or job applicant can request the pay range for their current position or a job they are applying for.
The term “pay range” refers to the salary or hourly wage that the employer reasonably expects to pay for the position at the time of the posting. It’s important to note that this requirement does not extend to other forms of compensation, such as bonuses or commissions.
Wage Data Reporting Obligations
Another component of the Massachusetts pay transparency laws is the requirement for certain employers to submit wage data reports. Employers with 100 or more employees must annually report aggregated wage data categorized by race, ethnicity, sex, and job category. This data, similar to the information required in the EEOC’s EEO-1 report, helps identify and address wage disparities within the workforce. The state will publish aggregate wage data on the Massachusetts Department of Labor website, providing transparency without disclosing individual employer data.
Protecting Employees Under Massachusetts Pay Transparency Laws
The new laws not only promote transparency but also protect employees who exercise their rights under these regulations. Employers are prohibited from retaliating against employees or job applicants who request pay range information or report violations of the law. This means employees can freely ask about salary ranges or file complaints without fear of discrimination or termination.
The Massachusetts Attorney General’s Office is responsible for enforcing these laws. For first-time violations, employers will receive a warning. However, subsequent offenses can result in fines ranging from $500 to $25,000, depending on the severity and frequency of the violations.
Preparing for Massachusetts Pay Transparency Laws
As an employer, it’s crucial to start preparing now for the implementation of these laws on July 31, 2025. Here are some practical steps to ensure compliance:
- Update Job Postings: Make sure all job advertisements, whether internal, external, or on social media, include the required pay range information.
- Determine Pay Ranges: Establish clear and accurate pay ranges for all positions within your organization. This involves reviewing current compensation structures and making any necessary adjustments.
- Communicate Changes: Inform your employees and potential job applicants about the new pay transparency practices. This can help build trust and create a more open workplace culture.
- Train Managers and HR Staff: Ensure that everyone involved in the hiring and promotion process understands the new requirements and the importance of compliance. Training should cover how to handle requests for pay range information and the prohibition on retaliation.
Benefits of Massachusetts Pay Transparency Laws
The Massachusetts pay transparency laws aim to create a more equitable and competitive job market. By requiring employers to disclose salary ranges and report wage data, these laws help:
- Close Wage Gaps: Transparency in pay can reduce wage disparities, especially for certain protected classes, by ensuring everyone is fairly compensated for their work.
- Boost Employee Morale: When employees know they are being paid fairly, it can lead to increased job satisfaction and loyalty.
- Enhance Competitiveness: Transparent pay practices can make Massachusetts a more attractive place for top talent, helping businesses build diverse and skilled teams.
Conclusion
The Massachusetts pay transparency laws represent a significant step forward in promoting wage equity and transparency. By understanding and complying with these new regulations, businesses can create a fairer and more inclusive workplace. Remember, the deadline for these changes is July 31, 2025. Start preparing now to ensure your business is ready to meet the new requirements and benefit from a more transparent and equitable pay structure.
Feel free to contact our team here for help navigating labor law changes like these.