On July 31, 2024, Massachusetts (MA) joined the growing number of states that require employers to disclose the pay range on job postings and to employees and applicants. The new MA law also requires large employers to submit annual pay data reporting.
Compliance Snapshot
- Pay Ranges on Job Postings: Beginning July 1, 2025, employers with 25 or more MA employees must disclose the salary range on job postings and to employees and applicants.
- Pay Data Reporting: Beginning February 1, 2025, and annually thereafter, private employers with 100 or more MA-based employees must submit copies of their federal EEO-1 reports to the State Secretary.
Pay Ranges on Job Postings
Beginning on July 1, 2025, employers with 25 or more MA employees must disclose the pay range in the following scenarios:
- Job Postings: Disclosure is required on any ad or job posting intended to recruit job applicants (includes any posting made directly by the employer or through a third party).
- Internal Promotion/Transfer: Disclosure is required to employees who are offered a promotion or transfer to a new position with different job responsibilities.
- Upon Request: The pay range for a particular position must be disclosed to employees holding such position, and to applicants of the position, upon request.
The law defines the “pay range” as “the annual salary or hourly wage range that the covered employer reasonably and in good faith expects to pay for the position at that time.” Importantly, unlike some other state requirements, the MA law does not require the disclosure of other benefits (e.g., healthcare benefits, commissions, etc.).
Notably, the law does not address whether the disclosure applies to remote positions or positions that can be filled by MA employees.
Pay Data Reporting
A unique provision of the new law is the requirement for large employers to submit pay data reporting to the state. Private employers are subject to this reporting requirement if they had 100 or more employees in MA at any time during the prior calendar year and are subject to federal EEO-1 reporting.
As background, private employers with 100 or more employees are required to annually submit federal EEO-1 reporting to the Equal Employment Opportunity Commission (EEOC). Currently, the EEO-1 reports only require employers to submit employee demographic information (e.g., race, ethnicity, sex) and do not require pay data information.
Nonetheless, covered employers can comply with the MA reporting requirements by submitting a copy of their federal EEO-1 report to the MA State Secretary. The first report must be submitted no later than February 1, 2025. Private covered employers must submit EEO-1 reports annually by February 1st, while union and public employers must submit their EEO reports every other year.
Potential Penalties
Non-compliant covered employers will be warned for the first offense and may be subject to a fine of up to $500 for the second offense and a fine of up to $1,000 for the third offense.
Employer Action
Though the new MA requirements don’t go into effect until 2025, employers with MA employees should start developing a plan to comply with the disclosure requirements. For administrative ease, employers subject to other state/local pay disclosure requirements may want to consider adopting a universal approach to job postings that complies with all state requirements.
Connect with a Sequoia consultant to learn how Sequoia’s compliance services are integrated in our benefits services and tailored solutions. And if you’re already a Sequoia client, stay on top of your employer obligations with your Compliance Checklist that highlights important compliance dates, action items, and resources.
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