For years, many Massachusetts businesses treated salary ranges as confidential. However, the landscape has changed with the “Act Relative to Salary Range Transparency.” If your business reached a specific growth threshold last year, your current job advertisements could be exposing you to state-level penalties.
Checking if the 25-employee rule applies to you
The first step in staying compliant is knowing exactly where your headcount stands. The law focuses on your average staff size from the previous calendar year. If your business averaged 25 or more employees, you are considered a “covered employee.” This is a comprehensive count that includes:
- Full-time and part-time staff
- Seasonal and temporary workers
- Remote employees who perform the majority of their work in Massachusetts
Because counting seasonal and remote workers can be complex, professional legal guidance helps ensure your headcount is accurate.
Recognizing which postings invite state scrutiny
Under the law, it is no longer enough to wait until the interview process to mention compensation. Any public advertisement on your website, social media or third-party boards must now include a salary or hourly range.
This transparency also applies internally. If you offer a promotion or a new role to an existing employee, you are legally required to provide the pay range for that specific position. Failing to include these ranges is the most common way small and family-owned businesses inadvertently trigger a violation.
Avoiding escalating fines and penalties
Massachusetts uses a tiered penalty system to ensure businesses take these rules seriously. While a first offense usually results in a warning, subsequent violations within a two-year period become expensive quite quickly. Fines for a second offense reach $500, the third reaches $1,000 and a fourth can result in civil penalties up to $25,000.
Managing your transition to transparency
Proactive compliance is the only way to ensure your growth does not lead to unnecessary regulatory debt. Taking the time to standardize your pay bands now keeps your postings well within the bounds of the law and protects your business from future claims.
Building a clear, documented strategy for your compensation ranges not only helps you avoid fines but also builds trust with the talent you are trying to recruit.
