The Commonwealth of Massachusetts is the latest of many jurisdictions—including neighboring Vermont as well as Minnesota—to adopt new laws promoting pay equity.
At the close of Massachusetts’ 2023-2024 legislative session on July 31, Governor Maura Healy signed an “Act relative to salary range transparency” (the “Massachusetts Act”) into law. Some provisions of the Massachusetts Act will take effect as early as February 1, 2025, when employers will have to submit data on pay and demographics to state authorities. Beginning July 31, 2025, covered employers seeking to hire in Massachusetts will be required to affirmatively disclose salary ranges in job postings or the case of a promotion or transfer of a current employee.
Laws mandating pay range disclosure in job postings were also enacted earlier this year in Minnesota and Vermont. Minnesota employers will need to disclose salary ranges and other compensation information in job postings starting on January 1, 2025. Vermont employers will be obligated to provide wage ranges in job advertisements as of July 1, 2025.
This Insight provides some context on the pay equity legislation trend and explains the requirements under these three new laws.
The Pay Equity Trend
The Massachusetts, Minnesota, and Vermont laws are the newest in a wave of legislation that has swelled in the last several years, adding new requirements related to affirmative pay range disclosure in job postings in California, Colorado, Illinois, New York, and Washington State. On the first day of this year, a new law in Hawaii took effect, requiring large employers to disclose pay ranges in job postings. In Washington, DC, lawmakers mandated pay transparency in job postings as of June 30, 2024. A similar Maryland law will take effect on October 1, 2024.
Still more states are considering such legislation. For example, the New Jersey Legislature is considering a bill that would require employers with 10 or more employees to disclose a wage or salary range and a general description of benefits and other compensation programs and would impose steep civil penalties on those who fail to comply. This proposal has already won the New Jersey Senate’s unanimous approval and is expected to pass in the state Assembly as well. As it stands, employers in Jersey City with just five employees in Jersey City already must comply with that city’s ordinance mandating the disclosure of salary information in postings (as explained in our Insight on local pay disclosure laws). Wage transparency requirements are also under consideration in Maine, Michigan, and Pennsylvania.
In short, the number of jurisdictions mandating salary range disclosure is rapidly expanding. Additionally, albeit not as quickly, some states have picked up on the idea that having employers report statistics about how much employees are paid will encourage pay equity. Soon, Massachusetts will become the third state to require larger employers to submit pay data reports to the state on a regular basis. California and Illinois employers of 100 or more employees already have pay data reporting obligations. But each of these states has different rules, seeking different details on different timelines. Compliance with these laws is not “one size fits all.” Local legislation is not far behind: a newly introduced New York City bill would require employers with more than 25 covered employees in the city to submit annual pay data reports compiling statistics on each individual employee, including, but not limited to, birth year, job title, month and year of hire, information about union membership, and managerial status. The New York City bill would also require employers to submit a certification every three years affirming that the employer understands and complies with applicable federal, state, and local equal pay laws. Whether an employer submits such certification would be made publicly available.
Massachusetts Salary Range Disclosure Requirements to Prospective and Current Employees
Beginning July 31, 2025, employers with 25 or more employees in Massachusetts must disclose the expected pay range, whether it be an annual salary or hourly wage, of a particular job in certain circumstances. The Massachusetts Act does not specifically require job postings to provide details about bonuses, commissions, other types of compensation, or benefits.
Employers will be required to disclose pay ranges:
- in all job postings, including those posted by a third party;
- to employees who are offered a promotion or transfer to a new position with different job responsibilities; and
- upon request, to the employee currently holding a position or an applicant to a position.
The Massachusetts Act prohibits an employer from terminating or retaliating against any employee or applicant for asking for salary ranges when applying for a job or promotion or otherwise enforcing their rights under the new law, such as by making a complaint to their employer or the attorney general or instituting or testifying in a proceeding under the new law.
The Massachusetts Office of the Attorney General will update its website by January 31, 2025, with information about the requirements of the Massachusetts Act to educate employers on their responsibilities.
Massachusetts Pay Data Reporting Requirements
Following California and Illinois, Massachusetts is the third state to expand its approach to promoting pay equity by collecting data from employers about pay and demographics. However, in contrast to those states, Massachusetts will not require employers to create new reports of particularized information. Rather, employers with 100 or more employees in Massachusetts that are subject to federal equal employment opportunity (EEO) reporting requirements will simply need to submit a copy of their EEO-1, EEO-3, EEO-4, or EEO-5 reports (“wage data reports”), which include workforce demographic and pay data categorized by job category and race, ethnicity, and sex, to the Commonwealth via an online portal or by using a form to be provided.
Private employers will be required to submit EEO-1 reports by February 1, 2025, and annually thereafter. Beginning February 1, 2025, unions and public elementary and secondary school systems and districts with at least 100 employees will be required to submit their EEO-3 and EEO-5 data reports every two years in odd years, while state and local governments will be required to submit their EEO-4 data reports every two years in even years beginning February 1, 2026.
Employers’ individual wage data reports will not be considered public records but will be included in an aggregation of wage and workforce data information that will be compiled and published annually by the state’s Executive Office of Labor and Workforce Development.
Minnesota Salary Range Disclosure Requirements to Prospective Employees
The requirement for salary range disclosure in job postings in Minnesota was part of an omnibus bill signed into law by Governor Tim Walz on May 17, 2024. Beginning January 1, 2025, employers with 30 or more employees in Minnesota must disclose the minimum and maximum annual salary or hourly range of compensation in all job postings. This requirement applies to any posting that includes qualifications for desired applicants, regardless of the source of the job posting (such as through a third-party recruiter) or the medium used (i.e., paper or electronic). The advertised salary or hourly rate may be a fixed pay rate instead of a range (e.g., “$20 per hour”) but may not be left open-ended (e.g., “up to $20 per hour” or “starting at $20 per hour”).
Importantly, in addition to pay information, employers are required to provide “a general description of all of the benefits and other compensation” offered to applicants, such as health or retirement benefits.
Vermont Salary Range Disclosure Requirements to Prospective Employees
A new law, entitled “An act relating to disclosure of compensation in job advertisements” (the “Vermont Act”), requiring Vermont employers to disclose compensation information, will take effect July 1, 2025. Employers with five or more employees will be required to provide the compensation or range of compensation, whether it be an annual salary or hourly wage, in any written posting for a specific job opening.
The Vermont Act’s disclosure requirement applies to job openings physically located in Vermont or performed remotely (whether inside or outside Vermont) if predominately for offices or workplaces physically located in Vermont. Moreover, the rules apply to any job openings, including new positions considering internal and/or external candidates, as well as transfers or promotions of internal candidates. The disclosure requirement does not apply to verbal announcements (i.e., on television or the radio) or to general announcements that jobs may exist but do not identify a specific job opening.
Special rules apply to job openings where the compensation is based on a commission or includes tips. Advertisements for job openings compensated on a commission basis need only disclose that the position is paid on a commission basis (in whole or in part) and are exempt from providing the exact compensation or range. Advertisements for job openings compensated on a tipped basis must state that the position is paid on a tipped basis and provide the “base wage” (i.e., the hourly rate paid by the employer, excluding expected tips) or a range of base wages for the job. The Vermont Act does not specifically require job postings to provide details about other types of compensation or benefits.
While employers must provide a good-faith estimate of compensation at the time the employer creates the job advertisement, the Vermont Act does not prevent an employer from hiring an employee at a wage or base wage rate that is more or less than the advertised rate “based on circumstances outside of the employer’s control, such as an applicant’s qualifications or labor market factors.”
Under the Vermont Act, an employer may not refuse to interview, hire, promote, or employ a current employee or applicant for asserting or exercising any rights related to the law. The Vermont Act requires the Vermont Attorney General’s Office to publish guidance on the law by January 1, 2025.
Enforcement Provisions and Penalties
Massachusetts
A single offense under the Massachusetts Act consists of all the job postings made by the same employer in a 48-hour period. Penalties begin with a warning for a first offense and increase to up to a $25,000 fine for each violation for a fourth or subsequent offense. Employers will have a grace period of two business days after notice of a violation to cure any defect before a fine is imposed in the first year that the Massachusetts Act is enforceable.
The Massachusetts Act vests exclusive enforcement authority in the Massachusetts Attorney General’s Office (MAGO) for most of the violations of the law, allowing the MAGO to impose fines or civil citations for violations of either provision of the Massachusetts Act. However, while not clearly stated, the law may carve out a private right of action for discrimination and retaliation claims, as it excluded the anti-retaliation and anti-discrimination section of the law from the MAGO’s “exclusive” enforcement authority.
Unlike other Massachusetts Wage Act violations, violations of the new law will not incur treble damages.
Minnesota
The Minnesota salary range disclosure law does not provide specific penalties for violations of the law. However, like existing Minnesota wage laws, the Minnesota Department of Labor and Industry and the Minnesota Attorney General will have the authority to investigate and enforce the new law.
Vermont
Violations of the Vermont Act will be enforced by the Vermont Attorney General’s Office or a State’s Attorney, which may restrain prohibited acts, seek civil penalties, obtain assurances of discontinuance, and conduct civil investigations. No specific fines or penalties are included in the law.
What Employers Should Do Now
- Revise job posting templates and processes for all open positions, transfers, and promotions to ensure multistate compliance.
- Review and update EEO data reporting processes to ensure compliance with federal and Massachusetts state requirements.
- Consider conducting a comprehensive pay equity audit to identify and correct any potential pay discrepancies.
- Train internal human resources professionals, external recruiters, and others involved in the hiring process on how to respond to inquiries about pay and benefits.
- While only some of the state laws explicitly address remote employees, consult with legal counsel to determine whether any of these requirements apply to candidates who could potentially become remote workers.
Staff Attorney Elizabeth A. Ledkovsky contributed to the preparation of this Insight.
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