The wave of state laws requiring employers to transparently disclose salaries, hourly rates, and benefits for the world to see—policies designed to give workers more information (read: power)—is currently continuing in Massachusetts, which has put its own Yankee spin on its new salary transparency law.
Since Colorado got the proverbial ball rolling in 2019, nearly half of all U.S. states have active or pending salary disclosure laws. Massachusetts’ law joins this initiative, requiring employers with 25 or more employees to disclose the salary range to both prospective and current employees upon request. The law also requires disclosure of this information to employees who are offered promotions, transfers, or lateral moves to new positions with different responsibilities.
Massachusetts’ latest legislative effort to codify pay transparency was recently signed into law by Governor Maura Healey on July 31. The bill, known as H.4890, is set to take effect on July 31, 2025. In line with our previous observations (here and here) that employers can expect a continued push aimed at removing a significant amount of guesswork from the job application process for their citizens, Massachusetts is the latest state to join this chorus.
The Massachusetts law generally functions like other state wage transparency laws. However, as an additional difficulty—and quite unique among such laws—the new law is designed to enforce in tandem with Massachusetts’ strict equal pay law.
Massachusetts’ equal pay law is the oldest of its kind in the country and one of the strictest anywhere, as it contains an important catch-all defense, the so-called “other factor than sex.” Under the Federal Equal Pay Act—and many state statutes that follow it—employers can avoid liability if they can prove that a pay difference between colleagues of the opposite sex is justified on the basis of seniority, merit, production output, or…“any other factor other than sex.” Given its status as a general protection and the relatively vague nature of the definition, the “The defense of any factor other than sex has divided the federal courts on questions of interpretation and enforcement. To avoid this dilemma, Massachusetts’ equal pay law simply eliminates this defense and requires an employer to prove – if a disparity exists – that it is explainable by factors such as seniority, performance, education or experience, merit, travel requirements, or location.
From an employer and management perspective, the new equal pay law requires a slight change in recruitment strategy. Since the new transparency laws are designed to provide more information to candidates during the search process, employers must be careful to keep compensation competitive. By taking a proactive approach with these requirements in mind, talent recruitment professionals can now look at the position holistically first and work accordingly to find talented candidates.
One important difference is that Massachusetts’ new law does not require disclosure of information about benefits beyond the salary range. Some states have gone even further and require disclosure of all position incentives, such as bonuses, stock options, profit-sharing opportunities and commissions. However, by limiting such disclosures, Massachusetts has not made all recruiting efforts fully transparent.
Employers who violate the new regulations will face progressive penalties. A first violation will result in a warning, and subsequent violations will result in a fine of up to $500 or $1,000. After the fourth violation, enforcement action will be taken under Massachusetts General Laws, Chapter 149, Section 27C.
The conclusion
While each state’s transparency laws function broadly similarly, they all differ: some require notice upon request, others (most) require notice without request, and many vary in disclosure requirements. We can thank our federal system for that, but it creates a familiar situation where an employer operating in multiple states cannot easily develop a consistent approach to compliance.
So what should you do? First, familiarize yourself with the specific disclosure requirements of each law. Then consider whether you want to take a very tailored approach and apply different employment practices in each state, or whether you want to use the ““greatest common denominator” — that is, the law that imposes the greatest burden on you — as a way to ensure compliance with all relevant laws and reduce the likelihood of making a mistake in a particular state. And finally, consult with your employment lawyer. None of the laws are difficult to understand on their own. However, understanding how to comply with all of them at once can be far more difficult.
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