New law slaps employers with fines up to $25K under salary rule from October 29

NEW legislation will soon penalize employers with hefty fines up to $25,000 if they fail to adhere to regulations regarding worker salaries.

The impending law, set to take effect on October 29, is aimed at boosting salary transparency for working Americans.

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A new law will fine employers if they do not adhere to regulations regarding worker wages[/caption]

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The law will have implications for both prospective and current workers[/caption]

Although there is no federal law regarding pay transparency in the US, regulations at the state and city level are a growing trend.

This legislation, aimed at promoting equity in the workplace, requires companies to be more transparent about their salary ranges and benefits.

Pay transparency laws require employers to disclose pay ranges in job listings or provide them to applicants or current employees upon request, although the specific requirements vary by state.

Over in Massachusetts, lawmakers have passed a new law, titled An Act Relative to Salary Range Transparency, that will take effect on October 29.

Employers in the state will be required to disclose wage ranges in job postings, listing the position’s full salary or hourly pay range.

This is defined as “the annual salary range or hourly wage range that the employer reasonably and in good faith expects to pay for such a position at that time,” per Mass.gov.

Massachusetts employers will also be required to be upfront about pay ranges with applicants or current employees upon request under the new law, which includes when:

• Applying for a position
• Being promoted
• Transferring roles
• Starting a new position
• Requesting for current position

WHAT ARE THE SPECIFICS?

The state pay transparency law applies to any employer with 25 or greater Massachusetts-based workers.

To be considered as Massachusetts-based, employees must perform the majority of their work in the state, whether this is telecommuting into Massachusetts or out of the state.

All workers who perform services for wage, remuneration, or other compensation are included, with seasonal, part-time, and temporary ones also applicable under the law.

Pay transparency is required for any Massachusetts-based job listing, including remote opportunities that can be performed by a Massachusetts worker or tied to a worksite in the state.

WHY THE NEW LAW?

The goal of the new legislation is to minimize pay gaps for women and people of color.

“Salary range transparency in the hiring process is one of the best tools to close gender and racial wage gaps,” per Mass.gov.

The website also cited research that found that people are more likely to consider applying for a job if the salary is listed in the job post.

By encouraging more applications, the law is aimed at strengthening the Massachusetts economy and its competitiveness by attracting the best talent.

WHAT ARE THE CONSEQUENCES?

According to the new Massachusetts law, employers are not permitted to retaliate against workers who seek to exercise their rights.

Punishments vary based on how many times an employer violates the law.

On their first offense, for example, an employer will simply receive a warning.

A $500 fine will be charged for their second offense, $1,000 for the third, and up to $25,000 for a fourth violation. 

The Massachusetts act was originally signed into law on July 31 last year by Governor Maura Healey.

It went into effect on February 1 by requiring employers with 100 or more workers to submit a workforce demographic data report. 

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