Massachusetts became the 10th state to require employers to include pay ranges in job postings under legislation signed into law this week by Gov. Maura Healy (D). The dizzying labyrinth of state pay transparency laws continues to grow, adding to the list of workplace issues regulated by the states in the absence of federal action.
What the law means: The law, H.4890, requires employers with 25 or more employees in the state to provide pay ranges – defined as the annual salary range or hourly wage range that the employer reasonably believes it expects to pay – in job postings (including those through a third party). Employers must also provide such information to current employees who are offered a promotion or transfer or a “new position with different job responsibilities.” Finally, employers must also provide the pay ranges to current employees holding the same position or an applicant upon request.
EEO Data Submission Required: The law also requires employers with 100 or more employees in the state to submit to the state all workforce demographic data the employer provides to the EEOC through EEO reports. Massachusetts joins California and Illinois in requiring submission of this data which it will then publish online in the aggregate. Notably, these three states would also require submission of pay data if the EEOC resumes collecting it through EEO-1 Component 2, as it plans to do.
A pay transparency patchwork: 10 states now require pay ranges in job postings, while several more require employers to provide such information upon request. At least 11 other states are currently considering similar requirements, while another 22 states and 22 localities have laws that prohibit employers from requesting salary history. Altogether, 32 states and 28 local jurisdictions have pay transparency and pay equity laws, with more on the horizon.
CHRO Takeaways: Large, multi-jurisdictional companies are facing an increased compliance burden associated with growing state laws that are often at odds with each other. As it relates to pay transparency specifically, CHROs and their teams should consider the following:
- Find your footprints: Make sure you know exactly where you have employee populations and whether those locations are subject to pay transparency requirements, such as in Massachusetts.
- State by state, or a uniform national approach? As your employees become increasingly subject to more and more state pay transparency laws, it may become more prudent to simply adopt a uniform national approach to compliance based on the strictest law (many HRPA members have gone to this approach). Find your tipping point – determine how many states – or which state in particular – with such laws would tip the balance into making a national approach more viable, and prepare accordingly.
- Communication is key: With more and more salary information becoming publicly available to your current employees, it is essential that employers and their front-line managers and supervisors can effectively communicate the reasons for compensation structures and strategies – employees will ask.
- Check on your recruiters: Make sure any third party you use for recruiting is also complying with relevant pay transparency laws.
- Consider an internal pay audit: All of these state laws are ostensibly about closing racial and gender pay gaps – consider conducting regular internal pay audits to find out where any such gaps exist and how you might go about closing them.
Not just pay transparency: Pay transparency is not the only workplace issue to reach a fever pitch of state regulation in recent years. As the federal government continues to be consumed by partisan legislative gridlock and regulatory ping-pong, states have increasingly moved to regulate the workplace, including:
- Pay transparency;
- Paid leave;
- AI and data privacy;
- Labor, including “captive audience meetings,” right to work, and secret ballot union elections; and
- Non-compete agreements/restrictive covenants.
