What You Need to Know About Massachusetts' New Pay Transparency Law

On July 31, 2024, Massachusetts enacted the Pay Transparency Act. This law builds on the Massachusetts Equal Pay Act by ensuring job applicants and current workers receive more information about position salary ranges.

This law will take effect in stages, beginning in February 2025 with the second date in July 2025. The Pay Transparency Act requires companies to provide salary and pay range information on job postings and for current workers who are offered promotions, transfers, or currently hold the position.

Additionally, the law mandates that large companies must report their pay data each year.  The law aims to increase transparency in pay and promote fair compensation practices. The critical requirements for companies under the new law are: 

Posting Requirements:

Companies with 25 or more workers in Massachusetts must advertise the salary range in job postings. While offering a worker a promotion or transfer to a different role with new responsibilities, companies must inform the worker of the salary range for the new position. Also, companies must give the salary range for a job to any current worker or job applicant who asks for it. However, this law does not require disclosing supplemental compensation such as bonuses or benefits. 

Reporting Requirements:

Companies with 100 or more workers in Massachusetts must submit their annual report to the state, including demographic and pay data by race, ethnicity, sex, and job category. Private companies can fulfill this requirement by submitting a properly completed federal EEO-1 Employer Information Report.  

Retaliation Provision:

Companies cannot retaliate against individuals who inquire about or discuss pay information. The law ensures that individuals can inquire about and discuss pay without fear of retaliation from their company. It also enhances efforts to close wage gaps by making salary information more transparent. 

Companies in Massachusetts should begin preparing now for the changes that will be effective in February 2025. Adopting a standardized process for job postings can simplify compliance with all relevant regulations in Massachusetts and elsewhere.

TCWGlobal can help! We aim to help keep you updated with all state and federal regulations and work with you to ensure compliance with relevant laws. For more information on pay transparency requirements, reference our location-based resource on the Compliance Hub.  If you need assistance with this, contact us at hello@tcwglobal.com or 858-810-3000.