Massachusetts Pay Data Reporting Deadline Almost Here – What do Employers Need to File?

Seyfarth Synopsis: The Massachusetts Executive Office of Labor and Workforce Development (EOLWD) has confirmed that employers subject to the new Massachusetts pay data reporting law will only have to submit their most recent EEO forms even though (in most instances) those forms do not contain employee compensation data.

As we reported previously, Massachusetts recently passed new legislation that imposes pay transparency requirements on most employers and creates a regime – in theory – for the Commonwealth to collect and publish aggregated information reflecting differences in pay between women and men and among members of certain racial groups.  The design of the statute includes subtle features that are intended to minimize the burden on employers in compiling pay data regarding their workforces, and in the absence of further action at the federal level, those provisions are effectively a nullity.

The pay data reporting provisions of the new statute are expressly and directly tied to certain employers’ obligations to file reports with the EEOC.  The statute enumerates several types of such forms, including the familiar EEO-1 form filed by most private employers, along with certain specialty reporting forms that apply to local unions (EEO-3), units of state and local government (EEO-4), and elementary and secondary schools (EEO-5).  In each case, in an approach intended to avoid creating additional administrative obligations for employers, the Massachusetts statute defines the employer’s obligations in terms of the forms “issued by the U.S. Equal Employment Opportunity Commission,” allowing employers to rely on forms that are already required by the federal government, rather than compiling the data separately for purposes of reporting to the Commonwealth.  This approach does not capture all employers, including for example small employers of less than 100 workers, institutions of higher education, and certain non-profit organizations.  These limitations are significant, given that more than 46% of American workers are employed by small businesses.

More fundamentally, the pay data reporting provisions of the new statute are in limbo, in certain respects, pending further developments at the federal level.  As noted above, the only pay data reporting provisions in the new Massachusetts law are tied to forms promulgated by the federal EEOC.  While the EEOC collected pay data from private employers through Component 2 reporting requirements in 2017 and 2018, the agency discontinued that practice in 2019 under the Trump administration.  Thus, current EEO-1 forms promulgated by the EEOC do not include any requests for data pertaining to employees’ compensation, and there will be no such data for the Commonwealth to aggregate and publish, unless and until the EEOC resumes the practice of collecting Component 2 data at some point in the future. Similarly, the EEO information forms unions and schools must submit do not contain employee compensation information. The current EEO-4 form required of state and local governments does contain salary band information (though information about the compensation of public employees is already widely available).

The Massachusetts Executive Office of Labor and Workforce Development has confirmed that the law requires only submission of currently existing EEO forms and acknowledged that, with the exception of state and local governments, employers in the Commonwealth will not be required to compile and submit information regarding employee compensation, unless and until the EEOC resumes collecting such information on a national basis. The EOLWD confirmed  that the law was intentionally structured to minimize the administrative burden on employers and noted that even without the compensation data, the current EEO forms include some demographic data related to sex, race, and ethnicity that may be useful to the department.

The EOLWD provided some additional insights related to the new requirements:

• The EOLWD is working with the Secretary of State’s Office to create a portal for employers to submit their EEO forms electronically, and the agencies intend to make that portal available prior to the first submission date (February 1, 2025).
• Employers will be required to submit the most recent form they filed with the EEOC prior to February 1^st. Typically, the deadline for employers to submit EEO-1 reports is May or June. As noted, the deadline for employers to submit their EEO reports to the Commonwealth is February 1. The EOLWD has confirmed that employers do not have to generate their EEO-1 report for 2024 by the February 1^stInstead, they may submit their most recent report reflecting data for 2023.
• In terms of which forms employers must submit, the EOLWD has stated that the information they are seeking is for Massachusetts employees only. To the extent that multi-state employers provide demographic information about employees in other states, that information will not be considered or included in the aggregated data that the EOLWD publishes. Employers may wish to consider submitting the portion of their EEOC submission that relates only to Massachusetts employees (i.e., MA establishment reports) or create a report that includes only the required information on Massachusetts-based workers, rather than submitting their consolidated EEO-1 report.
• The EOLWD also reinforced its position that it will not publicly release the EEO data that employers submit and that such documents are not public records subject to disclosure. Instead, the EOLWD will publish only aggregated data that does not identify particular employers.

We anticipate that early in the new year, the EOLWD will issue FAQs to address employer responsibilities. We will be closely monitoring and will provide additional information once the FAQs are released.