Is Pay Transparency and Reporting Coming to Massachusetts?

Massachusetts employers should keep an eye on a flurry of proposed legislation recently filed in both the state House of Representatives and Senate. One bill would impose new pay transparency obligations on Massachusetts employers. Another would require Massachusetts employers to report pay data to state regulators and create reporting obligations that go beyond similar obligations in place in other states.

Specifically, House Docket (HD) 2814 would require businesses that employ fifteen or more employees (full or part-time) in Massachusetts to disclose the “pay range” of a particular job: (i) in any job advertisement or posting, (ii) to an employee offered a promotion or transfer, (iii) to an employee in a specific position upon request, and (iv) to an applicant upon request. “Pay range” is defined as the “annual salary range or hourly wage range or other compensation that the employer reasonably and in good faith expects to pay for such position at that time.” “Other compensation” is left undefined, leaving open the question of whether bonuses, commissions, deferred compensation, stock options or other forms of equity, benefits, or other types of compensation must be disclosed. The statute would be enforced by the attorney general and violations would range from a warning for an initial violation, a $500 fine for a second violation, or an enforcement action under Massachusetts General Laws, chapter 149, section 27C. A very similar bill, Senate Docket (SD) 1521, is pending in the Senate.

Another Senate bill, SD.2331, would require employers of one hundred or more employees that are subject to EEO-1 reporting obligations to report aggregated wage data by race, gender identity, and employment category every two years as a supplement to the EEO-1 report to the state, beginning in 2024. Public employers of one hundred or more employees that are subject to EEO-4 reporting obligations would be subject to similar obligations commencing in 2025. The state would publish aggregate wage data reports on the Executive Office of Labor and Workforce Development’s website. It is not clear from the proposed bill what level of detail would be published, but presumably the aggregate data would not identify employers specifically. This bill appears to go farther than any other reporting obligation imposed by other states, or the federal government, and would create additional reporting obligations that many employers would find burdensome.

While it is unclear whether these proposed legislative changes will progress (as past efforts have not), with an employee-friendly legislature and governor now in place, they merit attention.

Ogletree Deakins’ Boston office will continue to monitor developments with respect to pay equity and transparency legislation in Massachusetts and will post updates to the firm’s Massachusetts and Pay Equity blogs as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.