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United Kingdom
Massachusetts has become the latest state to enact pay transparency legislation to improve wage equity and workplace transparency.
Governor Maura Healey recently signed Bill H.4890 into law, joining the growing list of states committed to addressing wage disparities and promoting fair compensation practices.
“I have long supported wage equity legislation and, as Attorney General, I was proud to work together with the business community to implement the 2016 Equal Pay Act,” said Gov. Healey. “This new law is an important next step toward closing wage gaps, especially for People of Color and women. It will also strengthen the ability of Massachusetts employers to build diverse, talented teams. I want to thank the Legislature, advocates, labor unions, and the business community for their hard work to see this through.”
The new law, not set to take effect until July 31, 2025, requires employers in Massachusetts with 25 or more employees to disclose salary range information on job postings and provide pay range details to current employees under certain circumstances.
The aim is to provide candidates and employees with enough information to make informed decisions about their careers and negotiate fair compensation.
Employers affected by the state’s new legislation must disclose pay ranges in job postings, including those made through external recruiters. Additionally, they must provide salary information to employees offered promotions or transfers to positions with different responsibilities. The law also mandates that they share pay range information with current employees or job applicants upon request.
The definition of "pay range" in the legislation is described as the annual salary or hourly wage range that an employer reasonably expects to pay for a position at the time of posting. It ensures that job seekers have access to meaningful salary information before applying for positions.
US states move towards pay transparency
Massachusetts' move follows a national shift towards greater pay transparency, with several states implementing similar laws. Colorado signed off legislation in May 2019, followed by states including Maryland, Connecticut, Nevada, Rhode Island, Washington, California, and New York. The momentum continues to build, with Hawaii, Illinois, Minnesota, Vermont, and Washington, D.C. passing or implementing new legislation in 2024.
The trend reflects a growing recognition of the importance of addressing wage inequality based on gender and race. By providing salary information upfront, the laws aim to level the playing field for all job applicants and employees, particularly benefiting women and minorities who have historically faced wage discrimination.
The argument for pay transparency
Proponents of pay transparency argue that it not only empowers individuals in their salary negotiations but also promotes a fairer and more inclusive work environment. Employers, too, stand to benefit as increased transparency can reduce recruiting costs and create a more efficient hiring process by attracting candidates aligned with the salary on offer.
As more states adopt pay transparency measures, employers must stay informed about the changing legislative landscape and adapt their hiring and compensation practices accordingly. The implementation of these laws may require significant adjustments to existing policies and procedures, but the long-term benefits of fostering a more equitable workplace are expected to outweigh the initial challenges.
