Boston, MA — Massachusetts has joined a growing list of states enacting pay transparency laws designed to place more power in the hands of workers by requiring employers to disclose salary ranges. Governor Maura Healey signed the new legislation, called H.4890, into law on July 31, marking a significant step toward eliminating secrecy surrounding wages. The law mandates that employers with over 25 workers must reveal compensation details to both potential and current employees if they request it, and also when recruitment is for promotions or transfers.
Starting from July 31, 2025, this legislation aligns with similar measures in nearly half the United States initiated by Colorado in 2019. These laws aim to equip workers with the necessary information to negotiate salaries and benefits better and ensure fairness and equity in hiring practices.
Unique among these various state laws, the Massachusetts statute will operate alongside one of the country’s strictest equal pay laws, which has been in effect since it was first established. The state’s equal pay law outlaws employers from using the “factor other than sex” justification unless they can explicitly cite seniority, merit, or other clearly defined reasons for pay discrepancies between genders.
This tandem enforcement of both the pay transparency and equal pay laws signals a robust effort by Massachusetts to tackle wage disparities head-on. By closing loopholes that might allow pay inequality, the state sets a rigorous benchmark for others to potentially follow.
For employers, these developments entail a shift towards more transparent and equitable salary practices. Companies must now prioritize clear and competitive compensation strategies to attract and retain talent, especially in a job market where workers can access and compare wage information more freely than ever before.
However, the law stops short of requiring employers to disclose full details on benefits, such as bonuses or stock options, focusing instead solely on salary bands. This partial transparency maintains a level of discretion for employers in their benefit offerings and overall compensation strategies.
Violations of this new law carry progressively severe penalties. Employers who fail to comply will receive a warning initially, followed by fines that increase with repeated offenses, potentially escalating to more significant legal consequences for persistent non-compliance.
As states each craft their pay transparency laws with distinct provisions, companies operating across multiple jurisdictions face the challenging task of navigating these varied requirements. Strategic adaptations will be necessary, whether that means adhering to the strictest law across operational states or tailoring practices to each state’s specifications.
Legal consultation has become a crucial component for enterprises looking to comply with these disparate regulations effectively. Understanding and applying a uniform policy that meets the highest standard of transparency laws may serve as a protective measure against inadvertent legal infractions.
The push for pay transparency is reflective of broader movements towards workplace fairness and gender equality, setting new precedents for employer accountability in salary practices. Massachusetts’ law embodies this shift towards more informed and equitable decision-making within the labor market, promising a landscape where employees not only know their worth but also understand how to advocate for it effectively.