Bill would boost salary transparency, tackle unfair compensation for women and people of color

(BOSTON–10/19/2023) Today, the Massachusetts Senate passed legislation to tackle pay inequities in the state, which significantly and disproportionately impact women and people of color across the Commonwealth. The bill targets these inequities by empowering employees with salary information, including when they are seeking jobs and receiving promotions, and by giving the state new data tools to track employment trends.

“This is simple: everyone deserves equal pay for equal work, regardless of your gender, race, ethnicity, or background,” said Senate President Karen E. Spilka (D-Ashland), who sponsored previous pay equity legislation that was enacted into law in 2016. “It is far too common for women and people of color to be paid less than their coworkers nationwide, and we are not immune to this discrepancy here. By passing this bill, the Senate stands united behind every worker—and with every business—in Massachusetts in our steadfast commitment to the fundamental principle that every person has the right to be treated and compensated fairly in the workplace.”

The bill—S.2468, also known as the Frances Perkins Workplace Equity Act—empowers job applicants by requiring employers with 25 or more employees to include salary range information in job postings. It also requires employers to provide salary ranges to employees offered a promotion or a transfer, as well as to employees currently working in a position, should they ask.

“The 2016 Equal Pay Act banned employers asking applicants for salary history. This benefitted job changers who were women and people of color, because their past low pay didn’t follow them their whole lives,” said Senator Patricia D. Jehlen (D-Somerville). “But it didn’t help applicants learn how much a job could pay or how to assess their work’s value. This bill allows applicants to know the pay range, which helps them have reasonable expectations. And it helps employers avoid interviewing people who will turn down a job due to salary.  It also creates tracking of critical data on pay disparities across demographic groups. Data collection is vital as we cannot fix what we don’t measure. So many people have helped improve and move this legislation.”

If signed into law by the Governor, the legislation would boost Massachusetts’ ability to track pay discrepancies. It requires employers with 100 or more employees to file annual employment data reports, including information on employee demographics and salaries, with the state. In addition, the bill directs the Executive Office of Labor and Workforce Development to track compensation data and file an annual report on data showing the Commonwealth’s progress toward equal pay for equal work.

The bill marks another step forward for pay equity in a state with a long history on the topic. Massachusetts was the first state in the nation to pass pay equity legislation in 1945, and most recently passed legislation in 2016, when the legislature passed An Act to Establish Pay Equity, which barred employers from asking prospective employees about their salary history and guaranteed the right of workers to discuss salary with other employees. The Governor signed the bill later that year.

“In the Commonwealth of Massachusetts, we take pride in our world-class academic institutions, competitive talent pool, and vast opportunities for economic success,” said Senator Paul Feeney (D-Foxborough). “Yet when we take a closer look at the earnings of Commonwealth residents, it is clear we continue to fall short of closing long-standing racial and gender wage gaps that dramatically suppress the earnings of women and people of color. By requiring disclosure of salary ranges for an open job posting, publishing aggregate demographic data to track wage inequities by race and gender across industries, and protecting an employee’s right to ask for salary range information in the workplace, we have the opportunity to recruit and retain skilled workers while closing the wage gap and ultimately boosting our Commonwealth’s competitive edge. Thanks to the collaboration of labor, community, and business leaders, we can take giant leaps in living up to the Massachusetts standard of equity for all workers.”

“After years of reporting anonymously, data proves that even employers who are working to eliminate disparities have not made progress,” said Senator Liz Miranda (D-Roxbury), who previously sponsored the bill in the House. “If we are to achieve racial and gender wage equity in the workplace, it is past time for this wage data to be aggregated and reported to the public and ensure that there are penalties for big business who fail to report. As the daughter of an immigrant who worked tirelessly as a cook in the hospitality industry, I have seen firsthand the racial and gendered wage disparities in our state, and immigrants are too afraid to speak up about these disparities. This legislation is critical in giving all workers a voice, ensuring that wage disparities are not continuing in silence.” 

According to a report from the National Women’s Law Center, women in Massachusetts who are employed full-time earn 85.7 cents for every dollar that men make. Women of color face even steeper inequities: Black women make 58.1 cents per dollar; Hispanic women make 53 cents; Native American women make 66 cents; and Asian women make 91 cents.^[1]

The legislation would boost awareness of the rights it guarantees employees, by directing the Attorney General to begin an outreach and awareness campaign. It would also give the Attorney General new authority to enforce the law among employers in the state.

The effort to boost salary transparency has robust support from businesses and industry advocates.

“The Wage Equity Now coalition worked hard for years to achieve passage of this bill,” stated former Lieutenant Governor Evelyn Murphy, the founder of the WAGE (Women Are Getting Even) Project Inc. “The transparency in this bill provides workers with knowledge that they are paid fairly and have opportunities to advance. That’s good for the Massachusetts economy and especially good for workers of color and women. The most powerful incentive to building the Massachusetts workforce is to provide workers with the knowledge that they are paid fairly and have opportunities to advance. This law advances that for all workers.”

“Associated Industries of Massachusetts and its 3,400 members thank the Senate for passing a bill that will make the Commonwealth a leader in wage equity and transparency,” said Brooke Thomson, President of Associated Industries of Massachusetts (AIM). “AIM is proud to have worked with the Legislature on a bill encouraging employers to create fair compensation systems that will give them a leg up in the competitive market for skilled employees. We look forward to continuing our collaboration with lawmakers to ensure that this bill reaches Governor Maura Healey’s desk as soon as possible.”

“We are grateful for the leadership of Senate President Spilka and Senators Jehlen and Feeney to pass this historic legislation,” said Keith A. Mahoney, Vice President of Communications and Public Affairs at the Boston Foundation (TBF), the convener of the Wage Equity Now Coalition. “TBF’s commitment is to equity and closing opportunity gaps, and this is a bold step and long overdue step that enhances transparency and the increases our ability to attract talent and improve our Commonwealth’s competitiveness.”

“The Massachusetts AFL-CIO applauds every effort to provide new tools for workers to obtain the wages and benefits they deserve,” said Chrissy Lynch, newly elected President of the Massachusetts AFL-CIO. “Labor unions have been at the forefront of the fight for wage equity and few people know better than rank and file trade unionists how powerful the full knowledge of pay, benefits, rights, and protections can be. This bill will provide that knowledge to employees across the state. Salary and wage transparency are necessary for a just economy, and we look forward to continuing our work with legislators to pursue economic justice in Massachusetts.”

A previous version of this bill having passed the House of Representatives, the two branches will now reconcile the differences between the bills, before sending it to the Governor’s desk.