CLIENT ALERT
Pay Equity Disclosure Requirements Expanded in Massachusetts
By Attorney Mark Ventola and Elizabeth Manning, Law Student
Introduction
On July 31, 2024, Governor Healey signed legislation “relative to salary range transparency” into law. Seeking to further address pay discrimination, the bill utilizes two different approaches to achieve this goal. First, there is a reporting requirement which requires large employers to report wage data to the state. Second, most employers will have a pay range disclosure requirement, applicable to both employees and applicants.
The Disclosure Requirement
The pay range disclosure requirement will become effective on July 31, 2025, one year after the Bill was signed into law. Applicable to employers with 25 or more employees in the Commonwealth, employers will be required to disclose the pay range, whether salary or hourly wage, for each position in three scenarios: (i) upon the posting of a job opening, even if posted indirectly through a third party;(ii) an employee is offered a promotion or transfer to a new position with different job responsibilities; and (iii) an employee holding the position or an applicant applying for the position requests the pay range. The pay range cannot be an arbitrary number and must reflect the range of compensation that the employer reasonably and in good faith expects to pay for such position at the time.
The Reporting Requirement
The reporting aspect of this legislation applies to employers with at least 100 employees in the Commonwealth at any time during the prior calendar year. For private sector employers, the first required report will cover 2024, and must be filed with the state by February 1, 2025. The report itself is an EEO-1 Employer Information Report, containing workforce demographic and pay data categorized by race, ethnicity, sex and job category. Additional requirements apply to local unions, school staff, and State and Local Governments.
Employers are required to submit the reports to the Secretary of State. The data collected will be compiled by the Executive Office of Labor and Workforce Development. The aggregate data will then be broken down by industry and made available on the Workforce Development website.
Failure to Follow Pay Transparency Bill
The Bill contains an anti-retaliation provision. In addition, the Attorney General has the ability to file suit against an employer for failing to follow either the reporting requirement or the disclosure requirement. There are also escalating fines associated with continued violations of this new law.
All Employers impacted by this legislation should prepare now in order to ensure compliance with both the reporting and disclosure requirements of this addition Pay Equity Law.
The attorneys in Sheehan Phinney’s Labor and Employment Law Practice Group are ready to assist you with any questions you may have regarding compliance with the Final Rule. This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice.