Business leaders applaud salary transparency law in Mass., with some compromises

Now that Massachusetts’ new salary transparency law has been signed by Gov. Maura Healey, business leaders say they consider it a fair compromise after years of negotiations.

Starting in 2025, employers with 25 or more workers must publicize the salary range in job postings. And businesses with more than 100 employees will have to report wage data to the state.

Massachusetts joins more than a dozen other states that have already passed similar laws.

Supporters say they hope the law will help shrink the wage gap for women and people of color, who historically make less money than their male and white counterparts.

Brooke Thomson, head of the Associated Industries of Massachusetts, a business trade group, said most employers benefit from being upfront about wages.

“It's going to weed out the folks for whom this job is not what they want,” she said, “and it helps the employee because they have more information when they're negotiating salary.”

But she said some employers are also wary of facing more regulations and being fined for mistakes in job postings. So she said her group successfully pushed for a “stepped approach” to penalties, which includes the opportunity to fix the initial postings.

“We're not trying to just punish employers,” she said. “We want every employer to know the rules.”

Thomson said about half the 3,400 businesses in her trade group already post salary ranges, in part because they use recruitment websites, like Indeed, that require that information.

She acknowledged that some employers may be sensitive to the accusation that they don’t pay their employees equitably.

“There may be unintentional inequities in the system, not because employers are trying to put them there, but because there have been these historic barriers to information and access,” she said. “And so while I think there's always that level of sensitivity, we've been really pleased that, for the most part, employers recognize this is really valuable information for them too, so that they can measure their own progress.”

“We were really excited to see this happen in Massachusetts,” said Da Hae Kim of the National Women’s Law Center, which advocates for salary transparency. “This is just the latest in a wave of transparency bills that have been passed in 2024.”

Kim added that some other states require all employers to post salary ranges, not just those with 25 workers or more.

As for the portion of the law requiring larger employers to report wage data to the state, Thomson said the Associated Industries of Massachusetts agreed it’s important to hold businesses accountable for equity goals.

“The concern, rightly so, from the business community was - is this collection of data aimed at providing information and moving us closer to equity? Or is it sort of a name and shame situation?”

Over the course of several drafts of the legislation, she said they managed to reach a compromise where the data will be “aggregated” by industry but not by specific employers.

She said the association also pushed to make sure that individual job candidates could not sue businesses who do not post salary ranges; the legislation leaves that up to the state attorney general.