Massachusetts is set to become the next state to enact a wage transparency law requiring employers to disclose pay ranges for all job postings and promotions.
Previously, we discussed similar laws in other states and municipalities, such as Maryland, Nevada, and Toledo, Ohio. The details of these laws vary, but all include employer wage range disclosures in addition to banning applicant salary history requirements.
The proposed law is part of the state’s ongoing effort to address gender and racial pay gaps. This effort began in 2016 with the passage of the Massachusetts Pay Equity Law, which made Massachusetts the first state to ban employers from asking about salary history during the hiring process. The bill, H4109, passed both chambers of the state legislature in October and is awaiting the signature of Governor Maura Healy.
What Does the Bill Require?
If signed by the Governor, the proposed bill would apply to businesses with 25 or more employees in Massachusetts and would mandate the following:
- Employers must disclose the pay range for a specific position in a job posting, in an offer of promotion or transfer to a new position with different responsibilities, and upon request by an employee or applicant.
- In addition to employers’ EEO reporting obligations, employers would also be required to report their employee data by gender, race, ethnicity, and job category to the state, as well as the median and mean wages for each group.
- Employers must not discriminate or retaliate against employees or applicants who exercise their rights under this law.
What Are the Benefits and Challenges of the Bill?
Supporters of H4109 argue that it would promote pay equity and transparency, reduce wage discrimination, and empower workers to negotiate fair compensation. House Speaker Ronald J. Mariano (D-Quincy) commented,
“With this legislation, Massachusetts will be one step closer to ensuring equal pay for equal work.”
Some small businesses have also raised concerns regarding liability and access to the proper resources to meet compliance obligations. Jon Hurst, President of the Retailers Association of Massachusetts, commented:
“The Legislature must stop adding red tape and liability exposure for small employers with no staff HR Director, no staff attorney, and no regulatory staff… If this is about big, publicly traded companies, make the requirements reflect that objective.”
Although there has been some resistance, many are on board. Advocates of the proposed law also claim that it would benefit employers by attracting and retaining diverse talent, reducing turnover costs, and enhancing the state’s reputation.
What Are the Next Steps?
The bill is still pending in the state legislature, but the governor is expected to sign the bill once it reaches her desk. If enacted, the bill would take effect one year from the date signed.
Verified Credentials will continue to monitor the situation and attempt to provide updates regarding Massachusetts’ pending Wage Transparency Law. The history and status of H4109 can be tracked here.
Pay history bans and pay transparency laws to protect employee rights and address employee equity have become increasingly common over the past few years. Employers may want to monitor the bill’s status in preparation for possible compliance obligations and discuss how this may impact hiring with their legal counsel.
