A well-defined total rewards philosophy empowers employers in any location to stay competitive in the talent market by shaping pay transparency strategies that align with evolving state regulations.
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Authors: Lindsay Peress Tom Wardrip

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Massachusetts joins a growing number of states and municipalities in adopting or expanding pay transparency and pay equity requirements. Employers in the state with as few as 25 employees must comply with legislation addressing pay equity and transparency, as of October 29, 2025.

The Act may require significant changes to compensation practices, related risk management and communications. While affected employers must comply with the Massachusetts regulation, many employers lack dedicated resources to navigate the new requirements effectively. Further, given the trend in pay transparency laws, organizations in any jurisdiction may benefit from the following insights and recommendations.

Differences between transparency and equity

Organizations often fail to distinguish pay transparency from pay equity, but the differences are important because they apply to distinct legislation.

Pay transparency typically focuses on how employers share pay information with applicants and employees. As of October 2025, 14 states and Washington, D.C., put in place pay transparency laws that include current wage disclosure requirements. Ten additional states have pending pay transparency bills.

Pay equity addresses fairness and closing wage gaps, and prohibits basing current pay on an applicant's or employee's earning history. Nationwide, 22 states and 24 jurisdictions prohibit employers from asking job candidates about past or current salaries, using salary history to determine pay — even if volunteered — and retaliating against employees who discuss their pay with coworkers.

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Snapshot of the Massachusetts law

Massachusetts lawmakers enacted the Wage Transparency Act in July 2024. Designed to improve pay equity in the workplace through pay transparency, the law requires employers to:

  • Submit federal Equal Employment Opportunity (EEO) reports to the Commonwealth, effective February 1, 2025.
  • Disclose pay ranges in job postings and to applicants and current employees upon request, including for internal opportunities like promotions and transfers, effective October 29, 2025.

Non-compliance can result in costly legal challenges, fines of up to $25,000 for repeat offenders and damage to the employer's brand. Employers can mitigate risk by documenting their processes and designating a compliance lead to manage interactions with regulators.

Interpreting the law

Complying with the pay range disclosure requirement may challenge HR leaders tasked with defining the applicable pay range: "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."

Massachusetts-based employers commonly ask how remote, part-time and seasonal workers factor into compliance, and how to comply as a multi-state employer. Other questions pertain to handling employee questions and complaints, as well as the role of third-party vendors that manage job-posting services.

Such inquiries reflect the concerns of employers nationwide as they endeavor to comply with state-specific pay transparency and equity laws. Employers in states without pay legislation may need to comply with laws from other states that do have such legislation.

Pay transparency: Drawing back the curtain can pose a challenge

Although it may present a challenging shift, employers increasingly recognize that offering pay transparency to current and prospective employees represents a strategic practice. The process of becoming more transparent can reveal that many compensation policies and procedures lack intentional design, uncovering gaps and inefficiencies when the "how" behind pay decisions comes to light.

Many employers still rely on asking job candidates for their current pay or salary history. In 2018, Massachusetts was the first state to ban employers from inquiring into salary history during the hiring process. The state allows employers to ask about previous wage or salary information after presenting an offer of employment with compensation.

Employer action steps

The following proactive steps can help organizations comply with existing or new pay transparency and equity laws, or prepare for future legislation.

  1. Establish pay ranges.
  2. Update current job postings and job posting templates.
  3. Implement internal disclosures.
  4. Conduct HR and manager training.

Gallagher can help

If your business hasn't addressed pay equity and pay transparency or if you wonder whether your pay transparency methods are sufficient in today's tight labor market, Gallagher consultants can help, including:

  • Compensation benchmarking, pay philosophy and structure creation
  • Pay transparency and anti-retaliation process and policy generation
  • Pay equity and compression analysis
  • Manager and HR training on processes, policies and compliance
  • Compensation transparency communication
  • Recruitment and job posting support

Contact your Gallagher representative for more information.

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Disclaimer

Consulting and insurance brokerage services to be provided by Gallagher Benefit Services, Inc. and/or its affiliate Gallagher Benefit Services (Canada) Group Inc. Gallagher Benefit Services, Inc. is a licensed insurance agency that does business in California as "Gallagher Benefit Services of California Insurance Services" and in Massachusetts as "Gallagher Benefit Insurance Services." Neither Arthur J. Gallagher & Co., nor its affiliates provide accounting, legal or tax advice.