Massachusetts’ new Salary Range Transparency Act (H.4890) becomes effective on October 29th later this year, but what is it and how will the changes that the law will bring about affect employees and employers? This article aims to provide some answers to these questions.
The Salary Range Act seeks to extend the MA state’s Equal Pay laws
In 1945, Massachusetts was one of the first states in the U.S. to pass equal pay legislation, but 80 years later, women and particularly, women of color, are still paid less than men on average. The original 1945 equal pay legislation has been expanded several times, the last being in 2016 with an updated Massachusetts Equal Pay Act. This became effective on July 1st 2018. The legislation sought to prevent employers discriminating against employees because of their gender and paying them less for doing comparative work to co-workers of a different gender.
‘Comparative work’ is considered work that is done in basically similar working conditions and involves similar effort, responsibility and skill.
There were a number of exclusions included in the Act, which allowed employers to pay some workers more than others in certain circumstances, such as:
- when seniority is part of a wage scale;
- when merit is part of a wage scale;
- when earnings are based on the quantity or quality of the work done;
- when earnings are related to factors such as educational level, previous training or prior experience;
- for travel, if required for the job.
If an employee believes that they are being paid less for comparative work because of their gender, they are able to file a claim against their employer for a breach of the MEPA legislation. A successful claim could result in the employer paying twice the difference in wages between the affected employee and a co-worker of a different gender, plus legal fees.
Although the 2018 legislation has generally improved pay disparity, there have been concerns raised that some employers, either unwittingly, or deliberately, have failed to make it clear what the salary ranges are for particular jobs. That has meant that employees who suspect that they are being paid less than other coworkers doing comparative work, or are unsure what difference in pay promotion might make, may be reluctant to ask their employers for fear that this could be used against them.
The Salary Range Transparency Act in Massachusetts
The signing into law of the Salary Range Transparency Act is an extension of the MEPA which aims to address the issue of ambiguity about salary ranges. The state government hopes that the new legislation will ensure that information about salary ranges and wage differentials are clearly disclosed in larger workplaces and protect the right of employees to ask for clarity about salary ranges without retaliation.
The new law will only affect employers, public and private, where there are 25 or more employees. The state’s Office of the Attorney-General will be leading a public awareness campaign on changes in the law, as well as have the authority to enforce the law. Penalties in the form of fines or citations could be imposed if there are violations of the law.
Employers of 100 or more employees will be required by the new law to provide reports disclosing wage data to the state. After processing, these reports will be published by the Labor and Workplace Development’s Executive Office.
The legislation requires public and private employers with 25 or more employees to disclose pay ranges in job postings, provide the pay range of a position to an employee who is offered a promotion or transfer and, on request, provide the pay range to employees who already hold that position or are applying for it.
The information received by reports on wage data should help to monitor significant gaps in wage equity where they occur so that further steps to eliminate gender and racial wage disparity can be introduced in the future.
What is meant by the ‘pay range’?
When the Salary Wage Transparency Act talks about a ‘pay range’, it means the annual range in salary or the range in hourly wages based on what the employer is prepared to pay. The pay range must be disclosed in three different situations:
- when a post is advertised;
- when an employee is applying for promotion or transfer to another job with the same employer;
- whenever an employee asks for information about a post they already have or by someone applying for a post.
Additional employer requirements
Employers which maintain their headquarters outside of Massachusetts, but still employ the minimum number of employees within the state as described in the new law must still comply with the law, dependent on the number of employees.
Employers must prepare for the changes in the law before the law becomes effective later this year by ensuring their postings and job adverts cover the required information about pay ranges. Any recruiting agencies employers use must also be informed that they must ensure they comply with the new requirements.
Employers should have made their initial wage range report to the state’s Executive Office of Labor and Workplace Development by February 1st this year. Subsequent wage range reports (by employers with 100 or more employees) are to be submitted annually by this date.
Penalties for breach of the new Act
Penalties may be imposed on any covered employer which breaches the provision of the Salary Range Transparency Act. The main penalties that could be imposed are:
- for the first offence – a warning;
- for the second offence – up to $500 in fines;
- for the third offence – up to $1,000 in fines;
- for subsequent offences – increasing amounts of fines.
Offences are for job postings of 1 or more made within any 48 hour period, i.e. if 5 posts for the same job are advertised, failure to disclose pay ranges would mean only a single offence.
Legal advice about the Salary Range Transparency Act
Whether you are an employer or employee in Boston seeking advice about the changes to the Equal Pay Act coming into effect in october this year and how they affect you, schedule a consultation with an experienced employment law attorney today.