By: Bill Osterndorf
Massachusetts has enacted a law requiring pay reporting by organizations with 100 or more employees in Massachusetts. This pay reporting is part of the Salary Range Transparency law that was signed by the Governor of Massachusetts on July 31, 2024. The law also has pay transparency requirements for job postings, which DCI has covered in a separate blog.
Coverage for Pay Reporting
Under the new Massachusetts pay reporting law, a covered employer is defined as an employer:
- “With not less than 100 employees in the commonwealth” during the prior calendar year
- “Subject to the federal filing requirements of a wage data report”
Unlike the pay reporting laws for California or Illinois, the Massachusetts law does state that it covers employees based outside of Massachusetts.
The federal reports associated with the Massachusetts law are as follows:
- The EEO-1 report, which covers private sector employers
- The EEO-3 report, which covers unions
- The EEO-4 report, which covers state and local units of government
- The EEO-5 report, which covers elementary and secondary schools
Filing periods and the data associated with the reports above is different for each type of report. This blog will focus on employers required to file the annual EEO-1 report.
Massachusetts Requires Annual Reporting for EEO-1 Filers
The Massachusetts pay reporting law states that employers covered under the law must annually submit a copy of the employer’s “EEO-1 data report” for the prior year by February 1 to the Massachusetts Secretary of State. An “EEO-1 data report” is defined as follows:
[A] completed copy of all required components of an employer’s Employer Information Report, as issued by the U.S. Equal Employment Opportunity Commission, including any successor report containing the same or substantially similar workforce demographic and pay data categorized by race, ethnicity, sex and job category.
The Secretary of State is then required to provide the Massachusetts Office of Labor and Workforce Development with the “wage data reports” submitted by covered employers. A “wage data report” is defined as “an EEO-1, EEO-3, EEO-4 or EEO-5 data report.”
The Equal Employment Opportunity Commission (EEOC) had collected pay data for several years as part of its EEO-1 reporting. However, EEOC only collected this pay data for calendar years 2017 and 2018. The pay data collection was then discontinued. While EEOC has suggested it may resume pay data collection, it has taken no formal action to do so.
The language of the Massachusetts pay reporting law means that there will be no pay information provided to Massachusetts in 2025 by EEO-1 filers. The law states that covered employers must submit “a copy of its EEO-1 data report.” There is no provision for the submission of any other type of report.
Future Pay Reporting for Massachusetts
While there will be no wage data submitted to Massachusetts by EEO-1 filers in 2025, there could be pay data reporting in the future if EEOC reinstitutes a pay data collection. There may also be pay data reporting to Massachusetts if the Massachusetts legislature changes the language of the pay transparency law. However, until one of these two events occurs, there will be no pay data reporting by EEO-1 filers.
It appears that Massachusetts expected that pay data would be collected from EEO-1 filers starting in 2025. It is not clear whether Massachusetts legislators expected that EEOC would resume pay data collections from EEO-1 filers or whether Massachusetts legislators believed that their pay transparency law would require an alternate approach to providing pay data if EEOC did not collect this data. Regardless, the pay transparency law itself provides no way to collect pay data from EEO-1 filers through any other means than the EEO-1 report.
Enforcement
As with the pay transparency provisions of the Salary Range Transparency law, any violations of the Massachusetts pay transparency law must be enforced by the Massachusetts Attorney General. Violations are punishable by a warning for the first offense, a fine up to $500 for the second offense, and a fine up to $1,000 for the third offense. Violations for a fourth or subsequent offense may result in a fine of up to $25,000. For the first two years after the pay transparency requirements take effect, employers will have two business days to comply after receiving notice of a violation before Massachusetts can impose a fine.
Actions to Take
There are several actions for EEO-1 filers to take in regard to the Massachusetts pay reporting law.
- Covered employers must submit their EEO-1 reports to Massachusetts by February 1 each year beginning in 2025 (even if these EEO-1 reports include no pay data component)
- Employers should monitor any administrative rules published by Massachusetts to determine whether these administrative rules provide guidance regarding the submission of pay reports to Massachusetts.
- Employers should monitor any action by the Massachusetts legislature to change the pay reporting law.
- Employers should determine what actions to take if EEOC reinstates any type of pay data collection associated with EEO-1 reporting.
DCI will continue to monitor developments in state pay reporting.
