In Massachusetts
On July 31, 2024, Massachusetts Governor Maura Healy signed into law An Act Relative to Salary Range Transparency, which will require certain Massachusetts employers to make changes to their compensation practices. Massachusetts has joined states who have similar laws like New York, Rhode Island, Connecticut, California, Colorado, Hawaii, Washington, Illinois, and most recently New Jersey.
Annual Wage Data Report Due Feb. 1, 2025
The first phase of the Pay Transparency law requires employers with 100 or more employees based in Massachusetts to submit an annual wage data report to the Secretary of the Commonwealth by February 1, 2025. The wage data report comprises the same data as the U.S. Equal Employment Opportunity Commission Employer Information Report, also known as the EEO-1 report. Employers with 100 or more employees should already be filing these federally each year. The wage data report includes workplace demographic and wage data categorized by race, ethnicity, sex, and job category.
Pay Range Postings Required Oct. 29, 2025
The Pay Transparency law posting requirement will go into effect on October 29, 2025. The law requires employers with more than 25 employees to post the pay range for both internal and external job postings. A “pay range” is defined as “the annual salary range or hourly wage range that the covered employer reasonably and in good faith expects to pay for such a position”. A “job posting” is any advertisement by the employer or a third party intended to recruit applicants for a specific job.
Additionally, employers must disclose pay ranges when current employees are offered a promotion or a transfer to a job with different responsibilities. On request, employers must also provide the pay range for an existing position to any employee or applicant.
Enforcement and Penalties
The Massachusetts Attorney General has the sole authority to enforce the new law. Violations include the following:
- First violation: warning
- Second violation: fine up to $500
- Third violation: fine up to $1000
- Fourth and subsequent violations: fines from $7,500 to $25,000
Next steps
Employers should ensure proper procedures are in place to make sure they adhere to the first filing deadline on February 1, 2025. Prior to the enactment of the October 29, 2025, requirements, employers should reevaluate their compensation practices as salary information will be more widely available upon request. It would also be wise to make sure that managers and other relevant employees involved in the job postings are educated on the new requirements. Contact us if you would like advice or guidance on how best to ensure compliance.
In New Jersey
On November 18, 2024, New Jersey Governor Philip Murphy signed the Pay Transparency Act (the Act) into law. The Act, which goes into effect on June 1, 2025, requires certain New Jersey employers to include an hourly wage or salary range in internal and external job postings.
Pay Range and Other Compensation Required in Job Postings
The Act applies to employers with 10 or more employees over a period of 20 calendar weeks who conduct business, employ workers, or accept applications in New Jersey. The Act fails to specify if all 10 employees must work in New Jersey. However, the best practice for employers with 10 or more employees is to comply with the requirements set forth in the Act to ensure they are not penalized.
Starting June 1, 2025, all covered employers will be required to include the following information in all internal and external job postings for new positions, transfers, and promotion opportunities:
- A range of the hourly wage or salary (specific hourly wage or salary is acceptable)
- A general description of other compensation programs and benefits an employee in the position would be eligible for
Employees To Be Informed of Internal Opportunities
Additionally, the law requires covered employers to make reasonable efforts to inform existing employees of any opportunities for promotion in their department that are advertised internally or externally. An employer is not required to satisfy the announcement requirement for a promotion of a current employee that is awarded based on years of experience or performance. Also, the announcement requirement does not prohibit employers from making a promotion on an emergent basis due to an unforeseen event.
Enforcement and Penalties
The New Jersey Commissioner of Labor and Workforce Development has enforcement authority of the Act which does not provide a private right of action. A covered employer who violates the Act is subject to a fine of up to $300 for their first violation and up to $600 for each subsequent violation. Failure to comply with the announcement or job posting requirements for a single job opening, promotion, or transfer opportunity will only be considered one violation regardless of how many different platforms or methods the opportunity is advertised through.
Next Steps
To ensure compliance with the June 1,2025 effective date, employers hiring or conducting business in New Jersey should think about conducting an audit with legal counsel. An audit will help assess compensation ranges for different roles and identify any pay disparities that need to be addressed. Employers should also prepare to revise job listings, implement procedures to notify current staff about promotional opportunities, and offer training to human resource staff on the updated disclosure obligations.
