Pay Transparency Laws Growing at State Level

Massachusetts is set to become the seventh state to require pay ranges in job postings and could also require employers to report pay data to the state. Meanwhile, Washington’s pay transparency law has spurred a wave of class action litigation that highlights the increased legal risk associated with state pay transparency laws. 

Growing patchwork of pay transparency laws: Massachusetts will join New York, California, Washington, Colorado, Illinois, and Hawaii as states that require employers to provide salary information in job postings. 

Who is covered: Employers with 25 or more employees in the state of Massachusetts would be required to comply with the law. The text of the bill is silent on remote workers, so it is currently unclear whether such workers would count towards the 25-employee minimum, or whether remote jobs that could be performed in Massachusetts would be covered by the law and require salary information to be posted. 

What is required: Employers must provide the annual salary range or hourly wage range for the position in job postings, including for recruiting through a third party. Such information must also be shared upon request with employees offered promotions or transfers, and to employees holding the same job. Employers are not required to provide benefits information in such postings. 

Pay data reporting is also on the table: The bill would also require employers to provide the state with pay data reports. However, this requirement would only apply if the national EEOC resumes collection of pay data as well – something the Commission is currently contemplating and is expected to undertake within the next year. 

Increased liability for employers: The new law – which still must be passed in unified form by both chambers (an outcome that is near certain) – only adds to the dizzying labyrinth of pay transparency obligations imposed on employers by several states, with potentially more on the way. A recent wave of class action lawsuits filed against employers under a similar law in Washington, which became effective this year, highlights the increased legal risk for employers. Such lawsuits have targeted employers for failing to provide pay ranges in job postings and could result in significant damages awards. 

Outlook: Pay transparency continues to be a hot issue on the state level, with several other states currently considering similar legislation (New Jersey and South Carolina, for example). It is likely that next year will bring a handful of new pay transparency laws. Meanwhile, action at the federal level remains unlikely in the near term.