Pay Transparency in Massachusetts: A New Era in Wage Disclosure
Aug 15, 2024Pay Transparency Will Soon Be the Law in Massachusetts
It won’t be long before it’s the norm everywhere
Over the past few years, there has been a steady stream of pay transparency laws taking effect throughout the United States. Even the federal government has proposed amending the Federal Acquisition Regulation to require all covered contractors to “disclose the compensation being offered to the hired applicant in the job announcements for certain positions.”
Most recently, on July 31, 2024, Massachusetts Governor Maura Healy signed into law “An Act Relative to Salary Range Transparency” (the Act), codifying new wage transparency regulations for Massachusetts. According to data from the National Women’s Law Center, Massachusetts is the 11th state to mandate pay transparency.
The Act requires the disclosure of salary information in job postings and the reporting of “aggregate wage data” to the state. The Act will take effect on July 31, 2025.
What Transparency Means
The Act requires private employers with 25 or more employees to post pay “ranges” with any job posting. Employers with over 100 employees must file copies of equal employment data with the Massachusetts Secretary of State’s office, which then shares this information with the Executive Office of Labor and Workforce Development.
A job posting is defined as “any advertisement or job posting intended to recruit job applicants for a particular and specific employment position.” This includes postings made through a third party. Pay range is defined as “the salary range or hourly range that the covered employer reasonably and in good faith expects to pay” for the position.
The Act also requires that covered employers provide the pay range to current employees upon request for any existing positions and for any positions offered as part of a promotion or transfer.
Pay Transparency and Pay Equity
Pay transparency is not the same as pay equity, though the concepts are related. At the federal level, pay equity laws — equal pay for equal work — have been in place since the passage of the Equal Pay Act in 1963 and the Civil Rights Act in 1964. All 50 states and the District of Columbia follow the Equal Pay Act, which prohibits discrimination based on sex. State and other local pay equity laws vary widely, apply to public or private employers, and may only apply to entities with a certain number of employees. In New Hampshire, where Orr & Reno is located, pay equity is codified under N.H. Rev. Stat. Ann. § 275:37-41, which took effect in 2015.
Even though pay equity has been “the law of the land” for over 60 years, most labor economists still calculate a pay gap based on gender and for other protected groups. This is why an increasing number of states and municipalities are passing pay transparency laws. The idea is that pay transparency will, in effect, help enforce pay equity.
What Now?
More pay transparency laws are likely coming, and soon. Employers in states without pay transparency laws can stay ahead of the compliance curve by implementing voluntary pay transparency measures now. This is especially true for businesses that operate in multiple states.
There are other reasons to act. Implementing strategies demonstrating a commitment to pay equity and transparency can help attract top talent and remain competitive in a tight labor market. As job candidates and employees become more comfortable discussing salaries and other benefits, employers must continually review their compensation practices to stay current. Most employees — 98 percent in one 2022 Monster poll — favor their employers disclosing salary ranges in job postings. More importantly, 53 percent said they would not apply for a job that doesn’t disclose pay scales.
If you have any questions or concerns about emerging pay transparency legislation and how it will affect your business, don’t hesitate to contact Orr & Reno for assistance.
