Massachusetts lawmakers said Monday that they reached a compromise on legislation that aims to close the racial and gender wage gaps, a breakthrough that improves the bill’s chances of becoming law.
The state’s biggest business group, Associated Industries of Massachusetts, endorsed the compromise bill, saying it would help attract workers to the state, which is contending with a tight labor force. AIM has worked with former lieutenant governor Evelyn Murphy and Megan Driscoll, founder of staffing firm PharmaLogics Recruiting, on improving the state’s equal pay law.
“This is really going to be a tool to make Massachusetts more competitive because we are putting out there that this is a place where you want to live and work because we are going to pay you fairly,” said Brooke Thomson, president of AIM.
The Greater Boston Chamber of Commerce, stopped short of endorsing the compromise, but its president, Jim Rooney, said in a statement that his group will continue “our dialogue with legislators to ensure this legislation is workable and practical for employers with the goal of a more equitable and inclusive business environment for all.”
Legislative leaders released the compromise bill some four months after a high-profile hearing on wage equity in May, which featured Samantha Mewis, a member of the United States Women’s National Team that successfully fought for equal pay for professional soccer players.
The Frances Perkins Workplace Equity Act — named after the first woman to serve as US Labor Secretary — combines two pieces of legislation that would strengthen the state’s existing Equal Pay Act passed in 2016, according to Representative Josh Cutler and Senator Patricia Jehlen, co-chairs of the Joint Committee on Labor and Workforce Development.
The compromise bill requires employers with 25 full-time workers or more to disclose salary ranges in job postings and protect an employee’s right to ask for salary ranges in the workplace. The bill also mandates organizations with 100 or more full-time employees to submit to the state copies of its federal equal employment opportunity report about workforce demographics. The state would aggregate the data by sector and publish the results annually so it can track inequities by race and gender.
The legislation would take effect in 2024. Employers that don’t comply with the salary transparency section would face penalties of up to $1,000 per offense. The attorney general’s office would oversee enforcement.
Other states — including California, Connecticut, and New Jersey — have passed similar salary transparency laws. Requiring employers to list a salary range on job postings — say from $80,000 to $100,000 for a project manager — can reduce inequities.
The provision aims to address the unintended consequences of the 2016 equal pay law, which barred employers from asking salary history. That practice had contributed to the pay gap because employers would base offers on the lower pay that women and minorities typically received.
So, employers began asking candidates salary expectations. But that again penalized women and people of color, who tended to underestimate their earning power while white male candidates tended to overestimate theirs.
The wage data aspect of the bill builds off the work of the Boston Women’s Workforce Council, which aggregates gender and racial wage gap data from about 250 employers on a voluntary basis. The legislation would create a comprehensive look at the racial and gender wage gaps that exist across more than 20 sectors.
The effort also has been supported by Wage Equity Now, a coalition of more than 80 organizations and labor unions.
The full House is expected to take up the legislation in the coming weeks. In a statement, House Speaker Ron Mariano said: “Enhancing wage transparency is a critical facet of the effort to ensure equal pay for equal work, and to make Massachusetts more competitive.”
Shirley Leung is a Business columnist. She can be reached at firstname.lastname@example.org.