One of the last laws that the Massachusetts Legislature passed this session was a pay transparency law, bringing the state in line with a recent trend. Here is what the employment lawyers at the Katz Law Group think you need to know about the new law.

The Law Requires Both Wage Reporting and Transparency

At its core, the law does two things:

1. Chapter 149, § 105E requires large companies to report U.S. Equal Employment Opportunity Commission (EEOC) wage data to the State Secretary, and
2. § 105F requires medium and large companies to disclose the pay range for jobs at the company.

Reporting Requirements

The first part of the law requires companies with 100 or more employees to send Equal Employment Opportunity data, including pay data categorized by race, sex, ethnicity, and job category, to the Massachusetts Secretary of the Commonwealth. This requirement can be satisfied by annual or biannual disclosures of the EEO-1 through EEO-5 data reports.

Pay Range Disclosure

More importantly for workers and employers, businesses with at least 25 employees have to disclose the pay range for each employment position:

• In the job posting,
• To each current employee who is being offered a promotion, transfer, or different job, and
• To each current employee in that position, or applicant for that position, upon request.

That pay range is the hourly rate or annual salary that the employer, in good faith, expects to pay workers in that position.

Effective Date

The first reporting obligation is February 1, 2025. Pay range disclosures must start being made on July 31, 2025.

Equal Pay Act Implications

A potential situation for everyone in Massachusetts to know about is that employees will have the right to request pay data about their own jobs, and this can lead to the discovery that their employer is violating the Massachusetts Equal Pay Act.

For employers, this poses a danger if they have been offering different salaries or hourly rates for the same position and experience level. Even if this is not done with a discriminatory intent – many companies make hiring decisions in which they offer the lowest amount that they think a job applicant will accept – variations in pay among similar workers can hurt the company's business brand and even run afoul of the law.

The Act Does Not Impact Small Businesses

As is often the case when employee rights expand, pro-business interests lament how it will hurt small businesses. In this case, that claim is misleading. The law only requires companies with 25 or more employees to comply, and only businesses with 100 or more employees have to report their wage data to the state government.

Employment Lawyers at the Katz Law Group

Whether you are a business owner or stakeholder who wants to ensure that your company will be in compliance with the new pay transparency laws when they go into effect, or are a worker who wants to invoke their new rights to see how much pay they deserve, the employment attorneys at the Katz Law Group can help. Contact us online or call our central Massachusetts law office at (508) 480-8202.