On July 31, 2024, Massachusetts Governor Maura Healy signed into law the Frances Perkins Workplace Equity Act (the “Act”). The Act—aimed at promoting wage equity and transparency—imposes new requirements relating to both pay disclosure and pay data reporting on many businesses with employees in Massachusetts. As this legislation takes effect, it is important for employers across the Commonwealth to understand these new requirements and the steps they must take to avoid potential legal pitfalls.
Pay Transparency – Effective Date and Key Requirements
The Act’s pay disclosure requirements take effect next year, on October 29, 2025. Once effective, all employers with 25 or more employees in Massachusetts (“Covered Employers”) must disclose pay ranges in all job postings. The Act does not define what it means for an employee to be “in Massachusetts,” so it is unclear whether employees who live, but do not work, in Massachusetts—or who work, but do not live, in Massachusetts—would count toward the 25-employee threshold.
The Act defines “pay range” as the annual salary range or hourly wage range an employer reasonably expects to pay for the position at the time of posting. Notably, the law does not indicate how wide a “pay range” may be. A “posting” is defined as any advertisement or job posting intended to recruit job applicants for a particular position, whether posted by the employer or a third party, such as a recruiter. Thus, employers could potentially be liable for job posts disseminated by third-party recruiters.
In addition, starting on October 29, 2025, Covered Employers must provide pay range information to any internal employee who is offered a promotion or transfer to a new position with different job responsibilities, even if that position is not publicly posted or advertised.
Data Reporting – Effective Date and Key Requirements
The Act’s data reporting requirements take effect on February 1, 2025 — earlier than the pay disclosure requirements — and only apply to employers with 100 or more employees in Massachusetts.
Most private employers meeting this threshold already must file an EEO-1 report each year with the federal Equal Employment Opportunity Commission (“EEOC”). The Act, however, now requires those employers to also annually file a copy of their EEO-1 with the Massachusetts Secretary of the Commonwealth, with the first filing due by February 1, 2025.
Local unions, state and local governments, and elementary and secondary school systems with 100 or more employees in Massachusetts — who already must file biennial EEO-3, EEO-4, and EEO-5 reports, respectively — will also be required to file those reports with the Secretary of the Commonwealth every two years. Under the Act, the first EEO-3 and EEO-5 reports must be filed by February 1, 2025. The first EEO-4 reports must be filed by February 1, 2026.
EEO-1, EEO-3, EEO-4, and EEO-5 reports provide employee demographic and pay data, categorized by race, ethnicity, sex, and job category. The Act allows the Massachusetts Executive Office of Labor and Workforce Development to collect these reports from the Secretary, and use them to create and publish anonymized, aggregate wage reports.
The Act’s Enforcement and Anti-Retaliation Provisions
The Act’s disclosure and reporting provisions will be enforced by the Massachusetts Attorney General. Employers who fail to submit an annual report or disclose salary range information will be issued a warning for their first violation, but will face fines of up to $500 for a second offense and $1,000 for a third offense. Fourth and subsequent offenses can result in fines of up to $25,000 per violation. For the first two years after the Act takes effect (i.e., until 2026), employers will have two business days after notice of a violation to cure any defect before a fine is imposed.
In addition, the Act prohibits employers from discriminating and retaliating against any employee or applicant who makes a complaint about an alleged violation of the Act to the employer or the Attorney General, or who takes action to enforce their rights under the Act.
Next Steps
Although the Act’s new pay transparency and reporting requirements do not take effect until 2025, employers can take steps to prepare for compliance now, by developing or revising job posting and internal transfer policies to ensure that pay range information is appropriately and uniformly disclosed when the Act takes effect.
Further, employers should stay tuned for any further developments and announcements from the Massachusetts government in the coming months, as the Act directs the Attorney General to provide information regarding the pay transparency and reporting requirements via a “public awareness campaign” by no later than January 2025.
If you have any questions about Massachusetts’ new pay transparency law, please contact the authors or your regular Saul Ewing attorney.
