07/30/2024 | News release | Distributed by Public on 07/30/2024 10:03
Pay transparency is the practice of openly sharing information about employee compensation within an organization or during the hiring process. Effective one-year after Governor Maura Healy signs the legislation, employers with more than 25 employees in the Commonwealth will be required to disclose salary range information on job postings and to provide pay range information to current employees in certain circumstances. Given Governor Healy's past efforts to achieve pay equality in the Commonwealth, we expect her to sign the bill.
Employers with 100 or more Massachusetts employees will have the additional requirement of submitting equal employment opportunity (EEO) and pay data annually to the Commonwealth. The first round of EEO reporting for covered employers will be due by February 1, 2025.
Massachusetts follows other states that have recently passed similar laws, including Hawaii, Illinois, Minnesota, Vermont, and Washington, DC, in addition to states such as California, Colorado, Connecticut, Maryland, Nevada, New York, Rhode Island, and Washington, with pay transparency laws already in place.
Covered employers will be required to:
The law does not distinguish between on-site and remote work, suggesting that covered employers should abide by job posting requirements for positions that could be performed within the Commonwealth.
Covered employers are required to:
Union, state, and local government, and elementary-secondary data reports are also subject to this act. This information will be due by February 1 each year.
The State Secretary will submit the wage data reports to the Executive Office of Labor and Workforce Development. The wage data reports held by the state's Secretary of Labor and Workforce Development are not "public records" as defined in the law. However, aggregate wage and workforce data reports as defined by the Executive Office of Labor and Workforce Development will be considered public records.
Covered employers are prohibited from discharging, retaliating, or discriminating against any employee or applicant for having taken the following actions:
Unlike violations of other wage-related statutes, there is no private right of action under the pay transparency law, which means employees and applicants - either individually or as a class - cannot bring lawsuits against employers for alleged violations. However, the state attorney general can bring an action against a covered employer for a violation of the law, including the power to levy incremental fines for each successive violation.
For the purpose of enforcement, an "offense" is considered one or more job postings for positions made by the same employer in a 48-hour period.
These changes are significant, and employers will need to evaluate their job posting policies to ensure compliance with the new salary data posting and reporting obligations. Employers will want to take a comprehensive look at their pay scales and compensation structures to ensure that the posted ranges are not only competitive but consistent among their employee population, looking closely at the salary distribution among varying demographics.
The Labor, Employment & OSHA attorneys at ArentFox Schiff continue to monitor updates to the new salary transparency law. For questions, please contact one of the authors or the ArentFox Schiff professional who usually handles your matters.