Starting Wednesday, many Massachusetts employers will have to comply with a new wage transparency law that requires them to disclose the annual or hourly pay range in job postings.
Gov. Maura Healey signed the bill, formally called An Act Relative to Salary Range Transparency, into law in 2024, calling it an important step to increase equity and close wage gaps in the commonwealth.
Employment lawyer Laura Studen, senior partner at Zucker Law Group in Boston, said the new law is built upon 2016’s Massachusetts Pay Equity Act. But she said this new version puts a little more pressure on employers to comply and make a good faith effort to ban secrecy policies in terms of salaries.
“The intention is to shrink the pay gap,” Studen said, noting that the law is “designed to promote fairness.”
Here’s what workers and employers need to know about the new law.
Why wage transparency?
According to the Massachusetts attorney general’s office, research shows that salary range transparency in the hiring process is one of the best tools to close gender and racial wage gaps.
And the AG’s office cites that most workers are more likely to apply for a job and trust the workplace if the pay range is listed in a job posting.
“The hope is by increasing transparency about pay ranges, disparities will disappear and we will see greater equity across gender, race, nationality, and so forth,” said Ryan Quinn, an assistant teacher professor at Northeastern University.
Besides just posting the salary range for job postings, the law also requires employers to provide the salary range upon request to any employee looking for a promotion or a transfer.
But Quinn said requiring a salary range, rather than a single number, only goes so far when it comes to closing wage gaps. He noted it is still quite “taboo” to talk about what people get paid and discuss salaries with other coworkers.
“Right now, if you’re an employee, it’s very difficult to know what the person I’m working right next to is getting paid,” he said. “You may not have access to that information,”
Effects on companies
The new law applies to any employer with 25 or more employees that primarily work in Massachusetts. It requires them to provide a pay range for any job they post — as well as disclose the pay range to employees for their current position, and tell them what the pay range would be for a new position if they’re offered a promotion or transfer.
Quinn said from an employers’ perspective, the new law is going to bring a greater regulatory burden.
“They’re going to have to include this in every job posting. And there are certainly some employers that … do substantial hiring with many, many positions,” he said.
Labor and employment attorney Kathleen A. Kearney-Berney, law partner at Hirsch, Roberts, Weinstein said many of her clients have been asking about compliance and the parameters of the new law.
“They’re asking me, what do I have to do and who do I have to tell it to?” she said.
If companies don’t comply, penalties range from a warning for the first offense to $1,000 for the third offense. The law says the attorney general can impose a much larger penalty for any subsequent offenses, according to the provisions laid out in the state code.
But Kearney-Berney notes that there’s no requirement for an employer to provide information on a position that is not open just because an employee is thinking of moving into another role.
“If there’s no opening, they’re not entitled to that information. I mean, an employer can always provide information that exceeds the law,” she said.
Studen said it remains to be seen how employers comply with the law, and whether it works as intended. For example, she said the expectation is that employers wouldn’t create a salary range that’s too broad, such as $50,000 to $500,000 a year, which wouldn’t be helpful.
But she said the flip side of gaining salary information is that there are always unintended consequences in trying to shrink the salary gap.
“One unintended consequence can be that employers will simply shrink the ranges on salaries for comparable work so that there will be fewer raises, fewer increases,” Studen said. “They may want to make sure that the people who are making outside the range are brought within the range, which may have a consequence to people having reduced compensation as a result.”
Employees or prospective employees who believe their rights have been violated are encouraged to file a complaint with the Massachusetts attorney general’s office.
