On July 31, Massachusetts Governor Maura Healey (D) signed into law a bill that is intended to increase wage transparency and close the gender-based wage gap in the Commonwealth. The law, which will take effect August 1, 2025, contains provisions concerning wage reporting, and also pay transparency in job postings.
Wage reporting
The U.S. Equal Employment Opportunity Commission collects workforce data from employers with more than 100 employees through various reports: EEO-1 reports contain workforce demographic data, including data by job category and sex and race or ethnicity; EEO-3 reports require local unions to submit demographic data including membership, applicant, and referral information by race/ethnicity and sex; EEO-4 reports require state and local governments to submit demographic workforce data, including data by race/ethnicity, sex, job category, and salary band; and, finally, EEO-5 reports require all public elementary and secondary school systems and districts with 100 or more employees to submit demographic workforce data, including data by race/ethnicity, sex, and activity assignment classification. The EEOC compiles this data, makes it publicly available, and uses it to produce a variety of reports.
Massachusetts now wants its Executive Office of Labor and Workforce Development to do the same thing. Beginning in 2025, Massachusetts employers with 100 or more employees and who are subject to the EEOC requirements will be required to provide the same reports to the Secretary of the Commonwealth. The Secretary will then provide the data to the EOLWD for the annual creation and publication of wage data and related reports broken out by industry type.
The law appears likely to apply to any company employing personnel in Massachusetts that has 100 or more employees in total, regardless of where any non-Massachusetts employees live or work.
Lastly, the reports submitted by employers will not be subject to public records requests.
In 2016, the Obama Administration proposed adding pay data to the EEO-1 report. The Trump Administration scrapped that proposal, which is expected to soon be revived by the Biden Administration or a Harris or other Democratic Administration. A new Trump Administration would be likely to drop it.
Pay transparency
Massachusetts joins California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Minnesota, Nevada, New York, Rhode Island, Washington state, and various municipalities in requiring that employers provide the “pay range” in their job postings. Pay range is defined in the new law as “the annual salary range or hourly wage range that the covered employer reasonably and in good faith expects to pay for such position at that time.”
The disclosure of pay ranges may confuse or complicate postings for jobs that include substantial bonus or incentive-based compensation. The legislation does not require bonus or incentive-based compensation to be included in a job posting and thus may cause applicants to underestimate the position’s total compensation. As a result, employers will have to be careful in crafting their job postings to ensure that candidates understand the full nature of possible compensation.
Next, the law requires employers to affirmatively provide the pay range when a current employee is offered a promotion, or transfer to a new position with different job responsibilities.
Finally, for current employees in a “specific employment position” or “applicant[s] for such position,” the law requires employers to provide pay ranges for that position upon request. This provision is vague. It seems to provide an opportunity for employees to compare themselves with others at the company where the pay range is not available or for those who might want to apply for a role absent a posting. Nevertheless, the term “applicant” is not expressly limited to internal applicants and thus theoretically could permit non-employees to inquire about pay data for specific positions.
The law applies to employers with 25 or more employees. Again, the effective date is August 1, 2025.
Enforcement
To the relief of employers, the statute can be enforced only by the Attorney General, meaning that neither employees nor applicants can sue for any alleged violation.
For the first two years of the law, employers can cure any violations within two days after notice of a violation before any fine is imposed. Thereafter, a first offense will receive a written warning, a second offense a $500 fine, and a third offense a $1,000 fine. Fourth and subsequent offenses are subject to fines of up to $25,000.
