Ryan J. McDonell, CPA, MSA, MSLT
Tax Manager

Massachusetts has joined a growing group of states that have enacted so-called “pay transparency” laws, and effective February 1, 2025, the first phase of Massachusetts’ “Act Relative to Salary Range Transparency” will require certain employers to report detailed workforce data to the commonwealth. In its second phase, effective July 1, 2025, the law will require employers to include detailed information about pay and benefits in all job postings.
Massachusetts joins 12 other states that have enacted pay transparency – also called “pay equity” – laws since 2019.   

Effective February 1, 2025, the law requires most employers with at least 100 Massachusetts-based employees at any time during the prior calendar year to file an annual report with the commonwealth that includes workforce demographic and pay data categorized by race, ethnicity, sex, and job category. Unions, state and local governments, and elementary and secondary school systems must submit wage reports every other year.
To ease the administrative burden of the legislation’s filing requirement, private employers are allowed to submit their annual federal Equal Employment Opportunity Commission EEO-1 Employer Information Report to satisfy the state reporting requirement. The reports must be submitted to the state secretary by February 1, and the Massachusetts Department of Labor will publish anonymized aggregated data on its website by July 1 of each year.

Pay information in job postings
Additionally, effective July 1, 2025, the law requires employers with at least 25 Massachusetts-based employees to include pay range information with each new job posting and to disclose the pay range to employees who are offered a promotion or transferred to a new position with different responsibilities. The law also requires employers to provide the pay range for a particular position to an employee who currently holds the position, or to an applicant for the position, upon request.

“Pay range” includes the annual salary or hourly wage that the employer “reasonably and in good faith expects to pay” for the position. Employers are not required to disclose bonuses or other benefits.

What employers should do to prepare
Employers should review their job posting and promotion practices to ensure compliance with the new requirements before the law becomes effective. Employers should bear in mind the staggered effective dates of the reporting and job posting provisions in preparing for compliance with the new law. To that end, employers should:

• Review their federal EEO reporting processes to ensure their reports are compliant and ready for submission by the February 1 deadline.
• Develop a strategy for compliance with both the reporting requirements and the job posting requirements.
• Implement training programs for human resources and management teams to ensure all responsible parties understand the requirements of the new law.
• Change existing written policies, or write new policies, ensuring a consistent approach to wages and salaries paid across the workforce.
• Develop communication plans to ensure internal employees and external job applicants receive consistent information about job openings.
• Consider conducting market research to help determine appropriate pay ranges for positions in the organization.

Enforcement
Enforcement of the Massachusetts pay transparency law will rest with the attorney general’s office, and the law does not include a private right of action for employees or applicants to sue for alleged violations.

The attorney general will have the authority to impose fines or civil citations for violations of the pay transparency law, and employees will be protected against retaliation for asking for salary ranges when applying for a job or promotion. A first offense for a violation of the pay data reporting or the salary range posting requirements is subject only to a warning, while subsequent violations are punishable by fines from $500 to $25,000.

If you have questions about how your company may be impacted by the Massachusetts pay transparency law, or would like help in preparing for the law’s requirements, contact your G.T. Reilly advisor.