Massachusetts Pay Transparency Law: Compliance Guide (2024)

On July 31, 2024, Gov. Maura Healey of Massachusetts signed the Frances Perkins Workplace Equity Act into law, indicating a shift toward more pay transparency for companies in the state.

This law is a component of a general movement across the United States meant to close pay discrepancies and advance equitable compensation policies. Compliance with this regulation becomes required on July 31, 2025, for companies with 25 or more employees.

If you’re a Massachusetts employer, this guide is for you. We’ll dissect the main points of the law, clarify what they mean for you, and provide practical suggestions to assist in compliance before the deadline.

Whether your company is a mid-sized firm with staff scattered throughout multiple states or a startup building its workforce, staying on target depends on knowing these criteria. With Mosey, corporate compliance becomes a breeze.

What Is the Frances Perkins Workplace Equity Act?

For Massachusetts companies with at least 25 employees, the Frances Perkins Workplace Equity Act adds many additional obligations.

Let’s go through these so you know what to expect:

Range of Pay

Employers must now include wage ranges on all job ads. This also applies to internal job transfers and promotions for anyone assuming additional responsibilities.

EEO and Pay Data Reporting

Companies with 100 or more employees must send comprehensive reports to the state, including demographic and pay information. Race, ethnicity, sex, and job type should all be included in this material.

Penalties and Enforcement

The Massachusetts Attorney General is responsible for enforcing these laws. Employers will be warned about first-time infractions, and repeated offenses could result in penalties ranging from $500 to $25,000.

What Are the Requirements for Salary Range Disclosures?

One of the most pivotal changes brought about by the Frances Perkins Workplace Equity Act for job seekers is the requirement that businesses publish wage ranges in job listings. This transparency seeks to address pay gaps by arming job seekers with a clear understanding of what to anticipate before applying for any position.

What exactly, then, is a “pay range?” The law defines this as the expected yearly salary based on reasonable and honest projections or what you intend to pay as hourly compensation for the role.

Though the basic pay must be stated, bonuses, commissions, and perks are not included. This affects your internal mobility policies and your hiring procedures in a couple of ways:

External Job Postings

Whether you’re hiring directly or through a third-party recruiter, all job descriptions should reflect the wage range for the position being filled. This regulation covers part-time and full-time jobs.

Internal Promotions and Transfers

You must provide the salary range for a new position even if an internal employee is transferring into it. Here, consistency is key — your pay systems should be in line with these new transparency regulations.

If you operate your business in multiple jurisdictions, consider streamlining your pay transparency policies across the board. This will reduce the risk of non-compliance and make the process easier overall.

What Are EEO and Pay Data Reporting Requirements?

If your company employs 100 or more Massachusetts workers, you will also be subject to EEO (Equal Employment Opportunity) laws and wage data reporting obligations.

Broken down by race, ethnicity, sex, and job type, these reports must contain compensation statistics and workforce demographics. Let’s discuss what you need to know about the reporting process:

Submission Deadline

The reports must be sent to the Massachusetts Executive Office of Labor and Workforce Development by Feb. 1 of each year.

Public Access to Data

The Department of Labor will post the compiled data on its website by July 1. This implies that while personal employee data is private, the public will still be able to see more general salary and demographic patterns of your organization.

Massachusetts is now joining states like California and Illinois, which have similar wage reporting rules. This degree of transparency is becoming increasingly widespread all throughout the U.S. Staying on top of these dates is vital, as failing to satisfy reporting requirements may lead to fines.

What Are the Penalties for Non-Compliance?

The Frances Perkins Workplace Equity Act will be enforced under the direction of the Massachusetts Attorney General. The statute lets workers submit complaints to the Attorney General’s office. However, it forbids private litigation — that is, direct employee lawsuits against their companies.

The law creates a tiered penalty structure intended to allow companies to become compliant without immediately suffering harsh financial penalties.

Here’s what that looks like in practice:

First Offense: Employers are warned after their first offense and given a two-business-day grace period to fix the infraction.
Second Offense: The second offense will incur a fine of $500.
Third Offense: A $1,000 fine will be imposed for a third offense.
Fourth and Subsequent Offenses: Depending on the degree of the violation, fines for fourth and subsequent offenses can range from $5,000 to $25,000.

Businesses will benefit from the grace period for the first two years that the law is in effect (until July 31, 2026), allowing them to resolve any problems before fines are levied. Penalties will become more harsh after that, so early resolution is a must.

How Is Retaliation Prohibited?

The protection provided to employees by the Frances Perkins Workplace Equity Act is another crucial component.

The legislation forbids employers from punishing staff members who:

File complaints regarding Act breaches
Try to apply their legal rights
Take part in legal or investigative processes connected to the Act

This implies that companies should make sure their internal rules align with these rights. Clear communication with your staff will ensure compliance and help cultivate a transparent culture.

What Do Massachusetts Employers Need To Do Now?

You still have time to get your business in order, as the law is scheduled to take effect in July 2025. Still, preventing last-minute compliance problems mostly comes down to preparedness.

These are the steps that you should start today:

1. Review and Adjust Your Pay Practices

Review your present compensation policies and systems first. Every job within your organization should have clearly defined, consistent compensation ranges. These ranges must be grounded in fair and honest approximations of the position’s value.

This also presents an opportunity for a pay equity analysis. A pay equity analysis can help you identify any current pay disparities and take proactive steps to address them.

Thanks to the Massachusetts Equal Pay Act (MEPA), which offers a “safe harbor” for companies who do honest audits of their pay policies and act to rectify gender-based discrepancies, conducting these studies has significant benefits for Massachusetts employers.

2. Get Ready for EEO and Pay Data Reporting

Employers with 100 or more workers must prepare for EEO and pay data reporting. Review your present EEO-1 reporting system to see if it complies with the new criteria. Working with HR managers will help ensure you’re gathering the relevant information, as you will also need to record compensation data that is not currently needed in the EEO-1 report.

Keep an eye on developments from the Massachusetts Executive Office of Labor and Workforce Development; the state is anticipated to offer further direction on how to format these reports.

3. Create a Communication Strategy

Pay transparency can be a delicate subject, and adding additional disclosure rules might raise concerns among staff members. This makes the development of a communication protocol extremely important.

Consider how you will approach your team about the changes, particularly in light of first-time pay range disclosure. Clear communication can address these worries and support your company’s dedication to equity.

4. Monitor Legal Developments

Employers operating in multiple states should develop a consistent strategy for pay disclosure as additional states pass new transparency rules. This will lower your legal risk over time and ease compliance.

Stay updated on any additions of extra criteria or directions on salary data reporting from Massachusetts. Following these trends can prepare you for when the law kicks in come 2025.

What Are the Benefits of Pay Transparency?

Pay transparency is important for attracting and retaining top talent. Today’s job seekers want more than just a pay stub. Salary transparency establishes confidence in your company from the very first contact — applicants want to know upfront whether your position matches their expectations.

Transparency about compensation also helps clarify the role’s perks and increases your business’s appeal to applicants. Still, it doesn’t stop with recruiting. Pay transparency also affects every member of your current team.

Employees who know they’re being compensated appropriately are employees who feel valued — which directly affects engagement and retention. Employees are more inclined to remain and grow with your business when they feel secure about their income.

Clear internal pay systems also help manage surprises. Transparency in wage ranges prevents unequal pay policies and fosters a workplace where everyone feels fairly treated. That type of consistency is vital, particularly when you add staff.

Take Action Today With Mosey

The Frances Perkins Workplace Equity Act marks a dramatic shift in how Massachusetts companies must approach pay transparency. Although these new criteria may initially appear difficult, they present an opportunity to improve compensation policies and foster workplace confidence.

Keep in mind that it’s not just about compliance. You should establish a company culture where fairness and transparency are pillars of good business. This is your chance to take action and elevate your organization.

If you’re ready to stay ahead of the latest laws and streamline your compliance, set up a free consultation with Mosey. We make it easy to manage HR policies, like pay transparency rules, and ensure compliance every day.

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