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What Massachusetts Employers Need to Know

By Contributor
Law

The New Pay-transparency Law

By Amelia J. Holstrom, Esq. and John S. Gannon, Esq.

 

Last year, Massachusetts joined a growing list of states with pay-transparency laws when Gov. Maura Healey signed “An Act Relative to Salary Range Transparency” into law. The law, which takes effect in various stages this year, will require many Massachusetts employers to disclose salary and pay ranges in all job postings and advertisements. The law also requires larger businesses to file certain wage data and information with the Commonwealth of Massachusetts.

According to the state Office of Labor and Workforce Development, the pay-transparency law is aimed at eliminating gender, racial, and other wage disparities, as well as boosting employee loyalty and improving morale. Here is what employers need to know.

Beginning Oct. 29, all businesses in the Commonwealth with 25 or more employees will be required to:

• Disclose pay-range information in all job postings and/or advertisements. This includes “any advertisement or job posting intended to recruit job applicants for a particular and specific employment position,” regardless of whether the employer recruits directly or utilizes a third party for such purposes;

• Disclose pay-range information to current employees who are transferred or promoted to a new position for the new position; and

• Upon request, provide pay-range information to employees for the positions they hold and applicants for the positions to which they applied.

The law defines pay range as the “annual salary or hourly wage range that the covered employer reasonably and in good faith expects to pay for that position at that time.” The statute also prohibits employers from retaliating against any employee, or applicant, who requests pay-range information. Employers who violate the new pay-transparency law can be fined by the Massachusetts attorney general. Conceivably, violations could also trigger a larger inspection of the employer’s pay practices.

 

 

Larger Employers Required to File Wage Reports

In addition to the new pay disclosure obligations discussed above, employers with 100 or more employees in the Commonwealth who are subject to the federal EEO-1, EEO-3, EEO-4, or EEO-5 reporting requirements will be required to file certain workforce demographic data with the Commonwealth of Massachusetts on an annual or every-other-year basis. Currently, EEO reports contain workforce demographic and pay data categorized by race, ethnicity, sex, and job category.

As of this past Feb. 3, employers with 100 or more employees in the Commonwealth subject to the EEO-1 reporting requirements were required to file a copy of their EEO-1 data report with the Commonwealth of Massachusetts. The law requires this to be done annually for EEO-1-covered employers on Feb. 1 or the next business day.

On the same date, employers subject to the EEO-3 (covered unions) and EEO-5 (covered schools) reporting requirements were required to file a copy of those reports with the Commonwealth. EEO-3 and EEO-5 reports need to be filed every other year. Likewise, employers subject to the EEO-4 (covered state and local governments) reporting requirements will need to file a copy of those reports every other year, beginning on Feb. 1, 2026.

Recently, the Massachusetts Executive Office of Labor and Workforce Development published a set of frequently asked questions designed to help employers determine if they are covered by the new filing requirements and, if so, what they need to do to comply. The FAQs can be found at www.mass.gov/info-details/workforce-data-reporting-faqs.

The reports submitted by employers will not be public records under Massachusetts law. In other words, members of the public will not be able to request and receive copies of these records. The Commonwealth, however, will use the data submitted by employers to publish aggregate wage and workforce data on the Department of Labor and Workforce Development’s website no later than July 1 of each year, beginning in 2025. These aggregate reports will be broken down by industry.

 

Next Steps

Needless to say, if you have more than 100 employees in Massachusetts and are subject to EEO reporting requirements, and you have not filed your wage-data report with the Commonwealth of Massachusetts, you need to act fast. As for the salary-range disclosures, although Oct. 29 may seem far away, employers should start preparing now to comply with the deadlines. If not already in place, employers need to start developing pay ranges for each position in their workforce.

Employers also need to consider how and to what extent posting pay ranges in job postings will impact morale in the workplace. For example, consider a scenario where your business places an advertisement for an entry-level position at $28 per hour. Now, let’s assume someone with your company has been working in that role (or a similar job) for a few years, and is earning the same wage. That current employee is likely to learn about the advertisement and question why they are not making more money. Employers need to be prepared with a communication strategy should this situation unfold.

Businesses may also want to consider conducting a pay-equity audit to ensure there are not any pay disparities, as employees will now be able to request and discuss this information in the workplace. There are other important benefits to conducting a pay-equity audit under the Massachusetts Equal Pay Act. For starters, it may help identify if you have any potential pay-equity liability in your workplace. Also, employers who conduct good-faith self-evaluations of their pay practices may have an affirmative defense against a pay-equity lawsuit.

If you plan to conduct a pay-equity audit, you should strongly consider working with your employment counsel to preserve the attorney-client privilege, which may prevent certain information from being disclosed in any subsequent litigation.

 

Amelia Holstrom and John Gannon are partners with the Springfield-based law firm Skoler, Abbott & Presser, P.C., a law firm exclusively practicing labor and employment law for more than a half-century, focusing on litigation avoidance, employment litigation, and labor law and relations; (413) 737-4753.

A New Posting Requirement for Massachusetts Employers

By Contributor
Law

Salary Transparency

By Michael McAndrew, Esq.

 

In an effort to increase transparency and equity in wage payment, the Massachusetts Legislature passed, and Gov. Maura Healey signed into law on July 31, H. 4890, “An Act Relative to Salary Range Transparency.”

The act is an extension of employee protections provided in the 2018 Massachusetts Equal Pay Act, a statute that made it unlawful for employers to discriminate on the basis of gender in the payment of wages and to prohibit employers from preventing, discouraging, or reprimanding employees who share wage information. Under the new act, covered employers no longer can keep secret from their employees and prospective employees pay information for positions within their company. The act has wide-ranging reporting and disclosure requirements of salary ranges.

The act’s provisions are twofold. First, it requires that employers disclose pay-range information to current and prospective employees. The act applies to ‘covered employers,’ which are defined as “any employer, public or private, that employs 25 or more employees within the Commonwealth.”

Michael McAndrew

Michael McAndrew

“Under the new act, covered employers no longer can keep secret from their employees and prospective employees pay information for positions within their company. The act has wide-ranging reporting and disclosure requirements of salary ranges.”

Under the act, an employer must disclose the pay range for positions listed in job postings, disclose the pay range for positions offered to current employees as promotions or transfers, and disclose pay-range information to current employees upon request. The act prohibits employers from discharging or retaliating against employees for exercising their rights under the act.

Employers will be required to start complying with these provisions on Oct. 29, 2025. The attorney general is required to conduct, within six months of the act’s passage, a public-awareness campaign regarding the requirements of the act.

Second, the act sets forth a system whereby employers are required to submit annual wage-data reports to the state secretary. The exact type and timing of the report that must be filed with the secretary depends on the size and type of the employer.

For private employers that employ 100 or more employees in the Commonwealth at any time during the prior calendar year that are subject to federal filing requirements of EEO-1 data reports, the employers must submit a copy of the EEO-1 data report to the secretary annually by Feb. 1. Massachusetts employers that are required to file EEO-1 data reports will be required to make their first report under the act by Feb. 1, 2025. Other types of employers, such as public employers, face different filing deadlines and requirements under the act.

 

Next Steps

After employers submit copies of their EEO data reports, the secretary has until April 1 to report this information to the Executive Office of Labor and Workforce Development. The Executive Office is then required to aggregate the information it receives from the secretary and post it on its website. It is important to know that, while aggregated salary information regarding certain professions will be available on the Executive Office’s website, individual employers’ EEO data reports will not be published. In fact, the act expressly provides that these records are not to be considered ‘public records.’

While this is administratively tedious, employers in Massachusetts must ensure that they comply with both the disclosure and reporting requirements of the act, or they will face heavy administrative fines. The attorney general has exclusive jurisdiction to enforce the wage-disclosure and annual reporting provisions in the act and can impose fines for an employer’s violation of the act and may obtain injunctive or declaratory relief for this purpose.

For a first offense, the employer will be given a warning. For a second offense, the attorney general can impose a fine of up to $500, and for third offenses, fines can be up to $1,000. For fourth and subsequent offenses, penalties are issued pursuant to Massachusetts General Laws chapter 149, section 29C, a violation of which can result in fines between $7,500 and $25,000.

For the first two years that the act is in effect, prior to levying fines for violation of the act, the attorney general is required to provide notice of the violation and give the subject employer two business days to cure the violation. For purposes of the attorney general’s enforcement of job postings, if multiple job postings are made after an initial job posting that violates the act, all posts for the same position that violate the act that are posted within 48 hours of the initial post will be considered a single violation.

Unlike the Massachusetts Equal Pay Act, “An Act Relative to Salary Range Transparency” does not provide for an employee’s private right of action for their unlawful discharge or retaliation by their employer for exercising their rights under the act. An employee may be able to assert such a claim under other discrimination laws or other causes of action. Further guidance on this and many other questions raised by the new law may be given once the provisions of the act become fully effective.

 

Michael McAndrew is an attorney in the Litigation and Employment Law practices at Bulkley Richardson.

Business Confidence Rises in April 

By
Daily News

Massachusetts employers grew more confident again in April, despite an economy slowed by inflation and geopolitical uncertainty during the first quarter. 

The Associated Industries of Massachusetts Business Confidence Index (BCI) gained 0.9 points last month to 58.1. The index has now risen for three consecutive months and sits comfortably within optimistic territory. 

The increase reflected strengthening employer views about both the Massachusetts and U.S. economies, even though real GDP declined at an annual rate of 1.4% nationally and an estimated 1.0% in the state during the first quarter of 2022. 

The Central Massachusetts Business Confidence Index, conducted with the Worcester Regional Chamber of Commerce, showed Worcester County employers with a 56.9 confidence reading. The North Shore Confidence Index, conducted with the North Shore Chamber of Commerce, was 61.8.  

At the same time, tax collections in Massachusetts were $2 billion more than expected during April, pushing the state at least $3.5 billion ahead of its year-to-date benchmark with just two months left in the fiscal year. 

“Massachusetts companies remain optimistic about the sustainability of the economic expansion even amid tightening financial conditions and uncertainties related to COVID-19 and the war in Ukraine,” said Sara L. Johnson, chair of the AIM Board of Economic Advisors. “Every element of the Business Confidence Index was in optimistic territory last month, with the highest reading for employers’ views about the prospects of their own companies.” 

The AIM Index, based on a survey of more than 140 Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009. 

The constituent indicators that make up the index were mostly higher in April. 

The Massachusetts Index assessing business conditions within the Commonwealth jumped 1.7 points to 57.3, down 3.1 points since April 2021. The US Index measuring conditions throughout the country moved into optimistic territory at 53.1, up from 49.9 in March. 

Employers are equally bullish about future business conditions and present ones. The Current Index, which assesses overall business conditions at the time of the survey, rose 1.5 points to 58.1. The Future Index, measuring projections for the economy six months from now, gained 0.3 points to 58.0. 

The confidence employers have in their own companies declined 0.2 points to 60.0, ending the month 1.6 points lower than in April 2021. 

The Manufacturing Index increased 0.7 points to 56.3 for its third consecutive monthly gain. The Manufacturing Index now stands 3.2 points less than a year ago. 

Small companies (60.0) were more optimistic than medium-sized companies (57.3) or large companies (56.7). 

Alan Clayton-Matthews, Professor Emeritus of Economics and Public Policy at Northeastern University, senior contributing editor, MassBenchmarks and a BEA member, said the state and national economies continued to create jobs during the first quarter of the year. 

“Massachusetts payroll employment in the first quarter grew at an annual rate of 5.2 percent, slightly faster than the 4.8% pace for the U.S.,” Clayton-Matthews said. 

“Between the first quarter of 2021 and the first quarter of 2022 employment increased by 5.3 percent in Massachusetts and 4.6% in the U.S. However, in March 2022, the state remained 2.4% below pre-pandemic payroll employment levels, which peaked in February 2020.”