Beginning on July 31, 2025, Massachusetts will join a host of other states1 in requiring employers to provide detailed pay disclosures in public-facing and internal employee job postings pursuant to the recently passed Frances Perkins Workplace Equity Act (the Act). Specifically, the Act will require covered Massachusetts employers to disclose employee pay ranges in job postings and submit annual wage data reports to the Massachusetts Executive Office of Labor and Workforce Development (EOLWD).
Pay Disclosure Requirements
The Act requires employers with 25 or more Massachusetts-based employees to disclose the pay range of a Massachusetts-based position when advertising or hiring for that position. Specifically, such covered employers must disclose the pay range for a particular position i) in any “job posting” for the position, ii) to any employee offered a promotion or transfer to a new position, and iii) to any employee holding a specific position, or to any applicant applying for a particular position, upon the request of the employee or applicant. The disclosed pay range should include either the annual salary or hourly rate range that the employer reasonably expects to pay and does not need to include other compensation, such as bonuses, commissions, or stock options. This differs from other states, such as Washington, which more broadly requires employers to provide a description of all benefits, bonuses, commissions, profit-sharing, stock options, and any other form of compensation as part of the compensation information shared with employees and applicants.
Under the Act, a job posting includes any advertisement or posting intended to recruit job applicants for a particular position, including recruitment done indirectly through a third party. The Act explicitly places responsibility for compliance on the covered employer to ensure that any third-party job posting meets the pay transparency requirements. Covered employers should thus consider revisiting any agreements with third-party recruiting agencies to ensure compliance with pay transparency requirements, and whether such agreements can allocate the liability that may result from a recruiter’s noncompliance with the Act, through indemnity and other similar provisions.
Reporting Requirements
The Act also requires private employers of 100 or more Massachusetts-based employees that are subject to EEO-1 reporting obligations to share a copy of the annual Equal Employment Opportunity (EEO) report with the EOLWD.2 The report must include demographic and pay data aggregated by race, ethnicity, sex, and job category.
Individual employer reports submitted to the EOLWD will not be considered public record. However, the aggregate wage and workforce data submitted to the state will be gathered and published on the EOWLD website to highlight any wage disparities.
Under the Act, all data reporting requirements will become effective February 1, 2025. However, wage data is not currently required on the federal EEO-1 report after the U.S. Equal Employment Opportunity Commission (EEOC) suspended the collection of these data in 2019. While the EEOC has hinted at restarting the collection of wage data in EEO-1 reports in the near future, the Massachusetts state wage data reporting obligations may be delayed until such obligations are fully implemented at the federal level. It remains to be seen how the state would require the reporting of aggregated wage data outside of the EEO-1 report.
Enforcement
The Massachusetts Attorney General is charged with enforcing the disclosure and reporting provisions of this law. Employees or applicants cannot individually sue a company for violating the Act’s disclosure or reporting requirements but may submit complaints to the Office of the Attorney General. For the first two years after the effective date of the Act, any covered employer found violating the law will have two business days after receiving notice of a violation to cure the violation before any fine is imposed. Failure to remedy a violation may result in a warning for the first offense, and the imposition of increasing fines for any subsequent violation. A single offense is defined under the Act as one or more noncompliant job posting made by the same employer within a 48-hour period.
The law also prohibits employers from taking any discriminatory or retaliatory action against applicants or employees who seek to enforce their rights under the Act. Employees may have a private right of action against an employer for violating the anti-retaliation and discrimination provisions of the Act.
Next Steps
Employers should speak with their employment counsel to ensure compliance with the Act’s requirements come July 2025. Massachusetts covered employers should begin preparing pay ranges for all positions, revisiting agreements with third-party recruiting agencies, and preparing job postings to include the necessary pay range information. Further, employers who operate in Massachusetts or any of the following states and localities should take this as an opportunity to review their hiring and promotion practices to confirm that they are in compliance with all potentially applicable pay transparency laws: California; Colorado; Connecticut; District of Columbia; Hawaii; Illinois; Maryland; Minnesota; Nevada; New York; Rhode Island; Vermont; Washington; Jersey City, New Jersey; and Cincinnati and Toledo, Ohio.
Wilson Sonsini follows developments in wage and hour laws, including those relating to pay transparency. Attorneys in the firm’s employment litigation and trade secret litigation practices can discuss pay policies and practices for compliance with applicable law. For more information, please contact Marina C. Tsatalis, Jason Storck, Matthew D. Gorman, or any member of the employment litigation and trade secret litigation practices at Wilson Sonsini.
[1] Wage transparency laws have been enacted in a growing number of other states and localities throughout the country, including California, Colorado, Connecticut, District of Columbia, Hawaii, Illinois, Maryland, Minnesota, Nevada, New York, Rhode Island, Vermont, Washington, and certain cities in Ohio, New York, and New Jersey.
[2] Local unions, public employers, and public-school systems with 100 or more employees that are subject to EEO-3, EEO-4, or EEO-5 reporting obligations must also share the reports with the EOLWD, but only on a biannual basis.
