U.S. - Massachusetts pay transparency law guide
Introduction
Governor Maura Healey signed Massachusetts long-awaited pay transparency bill (H.4890) into law July 31, 2024. The transparency portion of the law will take effect July 31, 2025.
The bill also has a reporting provision requiring applicable employers to provide their federal EEO-1 reports to Massachusetts on February 1st of each year.
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Massachusetts Pay Data Reporting Requirements
Who Needs to Report?
The Act requires private employers with 100 or more employees in Massachusetts at any time during the prior calendar year to submit an annual EEO-1 data report to the state (a federal report that employers will already need to fill out to submit to the EEOC).
What to Report?
EEO-1 reports require employers to submit workforce demographic data including race/ethnicity, sex, and job category. Employers must submit a copy of their EEO-1 report to the Massachusetts state secretary.
Where and When to Report?
Employers submit their pay data reports to the Massachusetts state secretary annually by Feb. 1. The Secretary will provide the information to the Massachusetts Department of Labor for the publication of aggregated data on its website by July 1 of each year.
Deadline: Pay range disclosures must be appended to job listings and pay records for established employees by July 31, 2025. EEO-1 reports must be submitted by Feb. 1 each year. EEO-3, EEO-4, or EEO-5 reports may also be due if applicable for the employer. EEO-3 and EEO-5 reports are due every odd-numbered year while the EEO-4 report is due every even-numbered year (e.g. first deadline for EEO-4 reports is February 1, 2026).
Cadence: Yearly (or semi-annually for EEO-3, EEO-4, or EEO-5 reports if applicable)
Massachusetts Employment Equity Standards
The Massachusetts Equal Pay Act (MEPA) says that employers cannot discriminate against employees because of their gender when deciding and paying wages. Employers cannot pay workers a salary or wage less than what they pay employees of a different gender for comparable work.
The law defines "comparable work" as work that requires substantially similar skill, effort, and responsibility, and is performed under similar working conditions.
MEPA permits differences in pay for comparable work only when based on legitimate Wage Influencing Factors.
Massachusetts Pay Transparency Requirements
The pay transparency portion of the Act requires private employers with at least 25 employees in Massachusetts to provide a minimum and maximum salary on all job postings.
Applicable employers must disclose the pay range for a position to employees who are offered a promotion or a transfer to a new position with different job responsibilities. Upon request, employers must provide the pay range for a particular position to an employee holding the position or to an applicant for the position.
"Posting" encompasses "any advertisement or job posting intended to recruit job applicants for a particular and specific employment position," including posts made directly by an employer or indirectly through a third party.
"Pay range" is defined 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 the time of posting.
Massachusetts' law does not require disclosure of bonuses or other benefits.
The Act makes it unlawful for a covered employer to take adverse action against any employee or applicant who has legally exercised their rights to enforce the law.
The Risks of Non-Compliance
The Massachusetts attorney general is the enforcer of the law. The Act does not include a private right of action on behalf of aggrieved employees or applicants.
In enforcing the Massachusetts law, the attorney general’s office may seek declaratory or injunctive relief and impose fines for failing to submit EEO reports or failing to post or provide pay range information as required.
Employers will receive a warning for a first offense for a violation of either the new law’s pay transparency requirements or data reporting requirements.
After the first offense, the attorney general has the authority to impose the following fines:
- Second offenses are subject to a fine of not more than $500.
- Third offenses are subject to a fine of not more than $1,000.
- Fourth or subsequent offenses are subject to civil fines of $7,500 to $25,000 per violation, depending on the circumstances.
The Act states that for enforcement purposes “an offense shall include 1 or more job postings for positions made by the same employer during a 48-hour period.” Accordingly, each posting made within a 48-hour period will not be considered a separate offense.
Additionally, the law specifically states that violations are not subject to treble damages under the Massachusetts Wage Act.
How Can Trusaic Assist with Massachusetts Pay Transparency and Pay Data Reporting Compliance?
1. Comply - Use Trusaic's GPDR solution to complete required reporting by compliance deadlines:
Applicability Determination: Perform an accurate assessment of your applicability, according to jurisdictional specific definitions and regulatory frameworks so you can understand your reporting obligations across the globe.
Deadline Management: Prepare ahead of time with project timelines, timely notifications, and reminders, to keep you on track to meeting jurisdictional deadlines.
Expert Legal Guidance and Support: Benefit from the expertise of our trusted pay equity attorneys, so you understand your compliance requirements across a diverse global regulatory landscape. Receive world-class customer support, including assistance throughout the compliance process.
Streamlined Data Extraction: Collect the necessary data for analysis and submission with a simple click of a button; powered by certified data integrations with the world's largest HCM, HR and Payroll platforms, including Workday, SAP, UKG and ADP. Provide data through Trusaic's Workplace Equity platform, a SOC 2 Type II and GDPR-compliant tool for data transmission.
Data Quality Assurance: Trusaic performs data validations to ensure your collected data and information aligns with the standards and definitions provided by each jurisdiction.
Compliant Report Outputs: Take away the burden of reporting by effortlessly generating outputs containing necessary compliance information.
Reporting Checklist: Follow step-by-step guidance on where, when and how to report to any jurisdiction's regulatory body, as well as your required internal disclosure and public posting obligations.
2. Correct - Use PayParity and OpportunityParity to understand, explain and resolve pay disparities:
Risk Assessments: Stay aware of any potential exposure to any government audit or litigation. Our cross-functional team of data scientists, statisticians, and government regulatory compliance experts have rigorously worked to reverse-engineer the calculations that will be used by jurisdictions to estimate pay disparities, so you can prepare in advance.
Understand your Pay Gaps: Leverage Trusaic's pay equity software solution to explain your pay gaps so you can understand the root causes and safeguard from equal pay claims and legal action.
Resolve Pay Disparities: Make pay adjustments where applicable so you can eliminate pay disparities and show improvements in your reported pay gaps from one year to the next.
Identify Barriers to Professional Growth: Ensure workforce diversity and equity with hiring, promotion, retention, and opportunity analytics using opportunity equity software solution.
3. Communicate - Use Trusaic's Workplace Equity Solution to communicate narratives and share salary ranges with confidence:
Workplace Equity Narrative: Communicate the sources of your pay gaps, progress objectives, and corrective measures to employees and internal stakeholders with Trusaic's Workplace Equity product suite. Show data-backed progress in your pay gaps over time.
Salary Range Explainability: Use Salary Range Finder to establish and post competitive and equitable pay ranges to confidently comply with pay transparency laws.
Mitigate Risk of Recurrent Pay Disparities: Ensure new hires receive fair pay offers with the use of external labor market data and internal pay equity analytics to reduce unplanned and expensive pay remediations.
Sign up for PayParity by October 31, 2024
and receive OpportunityParityTM at no additional cost
Sign up for PayParity by October 31, 2024 and receive OpportunityParityTM at no additional cost