Last month, Massachusetts became the 12th state to pass a pay transparency law, and other states are working on similar legislation that advocates say is critical to ending the pay gap for women and people of color.
On average, women across all racial and ethnic groups earn 16% less than men, according to the U.S. Bureau of Labor Statistics. It also found that Black women earn 85% of what white women earn, while Hispanic women earn 79% of what white women earn. Meanwhile, Black men earn 75% of what white men earn, and Hispanic men earn 73% of what white men earn.
“This new law is an important next step toward closing wage gaps, especially for people of color and women,” Massachusetts Gov. Maura Healey, a Democrat, said in a statement. “It will also strengthen the ability of Massachusetts employers to build diverse, talented teams.”
Pay transparency laws and penalties differ from state to state. Some laws require employers to post salary ranges in job ads, while others require employers to provide applicants a pay range during the interview process. These laws may also require employers to disclose to their current employees the salary ranges for their jobs.
The laws also carry financial penalties. For example, companies in Colorado that violate its pay transparency law can be fined up to $10,000 per violation. Fines for violating New York City’s law can reach as much as $250,000.
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