Massachusetts passes new law to expand wage transparency

At a time when pay equity and transparency are becoming increasingly important, Massachusetts has taken a significant step with the passage of House Bill 4890 (HB 4890), the state's new pay transparency law that expands on the previously enacted Massachusetts Equal Pay Act. This law, which takes effect on July 31, 2025, represents a major shift in the way employers and employees interact in salary negotiations. Here's what you need to know about this landmark law and its impact.

What is HB 4890?

HB 4890, officially known as the Salary Range Transparency Act (the “Act”), is designed to promote salary transparency and combat wage discrimination in Massachusetts. The Act requires employers to provide more information about salary ranges and report wage information in an aggregate form to ultimately close the gender pay gap and ensure fair compensation practices.

Important provisions of the law

(1) Disclosure of salary ranges:

One of the most important aspects of HB 4890 is the requirement for employers to disclose salary ranges in job postings. This means that an employer with 25 or more employees must provide in its job postings a clear and specific salary range that potential candidates can expect.

A job posting is defined as “any advertisement or notice of employment intended to attract applicants for a particular and specific job position,” which includes job postings made by recruiters or third parties. Salary range is defined as “the range of salaries or hours that the employer concerned reasonably and in good faith expects to pay at the time of the posting.” However, this definition is noticeably absent from other forms of compensation that are not based on salary or hourly wages, such as bonuses, commissions or other benefits.

(2) Payroll data reporting:

Employers with 100 or more employees in Massachusetts at any time during the preceding calendar year (and who are subject to the federal wage data reporting requirement) must submit demographic data on their employees and a wage data report to the Secretary of the Commonwealth. The filing may be in the form of federal EEO reports, but will include wage data. If this requirement sounds familiar, it is similar to the wage reporting requirement in California and Illinois.

(3) Protection against retaliation:

The Act prohibits retaliation against an employee who (a) has conducted himself in a manner protected by the Act, (b) has filed a complaint, (c) has initiated or caused to be initiated any proceeding under the Act, or (d) has testified or is about to testify in any such proceeding.

(4) Punish

Except for discrimination or retaliation claims, there is no private right of action, and the Massachusetts Attorney General is the only party that can enforce the law. The law provides the following penalties for violations:

• First offense: warning;
• Second offense: not more than $500;
• Third offense: not more than $1,000;
• Fourth or subsequent offense: $7,500 to $25,000.

The law states that “it is a crime to post one or more job advertisements for positions offered by the same employer within a 48-hour period.” Fortunately for employers, treble damages under the Massachusetts Wage Act are not available for violations of the law.

Interestingly, the statute's provision to combat discrimination and retaliation against employees is not included in the statute's provision that otherwise grants the Attorney General exclusive jurisdiction over enforcement. This structure creates uncertainty about the legislature's intent. Although the statute likely simply recognizes that employees may seek to enforce discrimination and retaliation claims by complaining to the Attorney General's office and participating in its enforcement actions, it is conceivable that plaintiffs' attorneys will argue that employees have an implied private right of action under this statute to bring complaints of discrimination and retaliation under the statute, including under the Wage Act.

To be clear, there is no positive evidence in the statute itself that a private right of action exists with respect to a potential violation of the statute. Because the private right of action provided for in MGL c. 149, enshrined in § 150, was not amended to include § 150F within its scope, the better interpretation is that only the Attorney General has enforcement authority with respect to this section under GL c. 149, § 2, even if it is not explicitly stated here. In addition, the Attorney General noted in a press release that “employees will receive protection from retaliation for asking about salary ranges when applying for a job or promotion,” seemingly suggesting that the Attorney General will provide such protection rather than some other source. Press Release, Office of the Massachusetts Attorney General, Governor Healey Signs Equal Pay Law. Further information may be provided during the Attorney General's upcoming public education campaign, as required by section 8 of the Act. Notwithstanding the foregoing, any claims that employees may be able to assert against the Attorney General or otherwise shall be subject to the statutory prohibition on treble damages.

Impact on employers

The law brings with it several new obligations for employers.

Companies will need to update their hiring practices to comply with the new salary disclosure requirements and may need to adjust their internal salary structures. This could include re-evaluating job descriptions, revising compensation strategies, and investing in training to ensure compliance with the new rules. Employers should regularly conduct a pay equity analysis with outside consultants to understand potential liability risks in their compensation practices. This also allows employers to take advantage of the safe harbor provision under the Massachusetts Equal Pay Act (“MEPA”).

More specifically, under the MEPA, which took effect on July 1, 2018, employers that (1) conduct a diligent and reasonable audit of their pay system and practices within three years of the filing of a claim and (2) have made reasonable progress in eliminating any prohibited gender pay gaps uncovered by the audit will be able to defend against any MEPA claims and will be barred from recovering liquidated damages.

While these changes require time and resources up front, the long-term benefits are a more transparent and equitable workplace. By proactively addressing pay equity and being transparent about compensation, employers can improve their reputation, attract top talent, and reduce turnover. Additionally, by conducting proper audits under the MEPA every three years (and working to resolve any issues), employers can build a defense in the event of a lawsuit.

outlook

The law is the next domino effect in an area where states are intervening to ensure greater pay equity and transparency.

When the law goes into effect, employers will have to grapple with these changes and adapt to the new landscape of compensation practices. By enacting transparency and implementing wage reporting requirements, Massachusetts is the latest state in a growing trend to set a precedent for fair wage practices that could influence other states and industries in the future.

It is essential for employers to educate themselves on the details of the Act and how it interplays with existing laws such as MEPA, and to seek legal advice to ensure compliance. As more and more different standards emerge, it is important that employers work with experts in the field to stay compliant and properly address their compliance in this area.