How Massachusetts’s New Pay Law Will Give Large Agencies a 30% Hiring Advantage

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New Law Fundamentally Changes Rules for Many Massachusetts Employers

On October 29, 2025, the Massachusetts Pay Transparency Law (M.G.L. c. 149, § 105F) goes into full effect. This law fundamentally changes the rules for hiring, promotions, and compensation discussions for many Massachusetts employers. The law does not directly apply to smaller insurance agencies. However, the law may, in practice, materially affect the effectiveness of exempt agencies’ job offers. To compete, exempt agencies may have to voluntarily adopt the law’s salary disclosure requirements. (See below).

For insurance agencies and their commercial clients who are not exempt and have not yet prepared, this is no longer a future-planning item; it is an immediate compliance matter. Here is what you want to know.

Are You a “Covered Employer”?

The law’s main disclosure rules apply to employers with 25 or more employees whose “primary place of work” was in Massachusetts during the prior calendar year.

How you count those 25 employees is critical:

• Count Everyone: This isn’t just your full-time staff. You must count all individuals performing services for wages, including full-time, part-time, seasonal, and temporary workers.
• The “Primary Place of Work” Test: This definition is broad. It includes, for example:
  1. Your hybrid or fully remote employees located in Massachusetts.
  2. Out-of-state remote employees whose primary place of work is Massachusetts (e.g., they report to or are assigned to a Massachusetts office).

Employers must calculate this headcount once annually, by averaging the number of employees on the payroll across all pay periods in the preceding year.

When Employers Must Disclose Salary

Starting October 29, 2025, companies that meet the 25-employee test must disclose pay ranges when any of these three conditions apply:

1. Job Postings: You must include the pay range in any job posting for a position where the primary place of work is in Massachusetts. This applies to ads for new producers, account managers, or claims staff, including remote-eligible positions.
2. Promotions and Transfers: You must provide the pay range to an employee who is offered a promotion or a transfer to a new position that has different job responsibilities.
3. Upon Request: You must provide the pay range for a specific position to an applicant upon request. Furthermore, you must provide the pay range for an employee’s current position to them upon their request, even if there is no vacancy.

What Exactly is a “Pay Range”?

The law defines the “pay range” as the annual salary or hourly wage range that the employer “reasonably and in good faith” believes it would pay for the position at the time of the posting.

This “good faith” language is key; it means you cannot post a broad, essentially meaningless salary range that is untethered from the employer’s actual target salary for the advertised position. It must be based on legitimate factors, such as market data, your compensation philosophy, or internal equity.

• For Commissioned Staff: For roles like producers, where pay is commission-based, you must include the commission range you reasonably expect the position to pay.
• What’s Not Included: The law explicitly does not require you to disclose bonuses, benefits, or other forms of compensation in the posting.

Enforcement and a Critical “Grace Period”

For employers who are not yet compliant, the law’s enforcement mechanism is the most critical piece of information to understand today.

The law will be enforced by the Attorney General’s Office (AGO). Penalties are tiered: a warning for a first offense, followed by a fine of up to $500 for a second offense, $1,000 for a third offense, and, for a fourth or subsequent offense, the Attorney General may assess a civil penalty based on a separate statute’s schedule of civil penalties. Under that statute, the maximum amount assessable would, depending on intent, or the lack thereof, either be $7,500 or $15,000.

However, the law provides a two-year “grace period.” Through October 29, 2027, employers who receive a notice of violation from the AGO will have two business days to correct the violation and avoid a fine. This is a crucial, short-term safety net, but it is not a substitute for compliance.

Also, the law limits nonconforming job posts made on about the same date from being counted individually as violations, stating: “an offense shall include 1 or more job postings for positions made by the same employer during a 48-hour period.”

How The Required Salary Disclosure for Larger Firms May Impact Smaller Firms’ Hiring

While agencies with fewer than 25 employees remain legally exempt from Massachusetts’s new pay disclosure mandates, they now face a stark competitive reality: their silence on salary has become a liability in the war for talent.

The New Playing Field

After October 29, 2025, job seekers in Massachusetts will encounter a fundamentally altered landscape. Larger companies’ postings will display clear pay ranges, while exempt companies’ listings will likely lack this information.

Data confirms what job seekers already know: transparency wins attention. According to CareerBuilder’s research, 80% of U.S. workers are more likely to apply when positions disclose salary, yet 55% of employers still withhold this information until interviews..

Search Engine Bias

Beyond candidate preference, non-disclosure of salary creates search engine biases that decrease the likelihood of small companies’ offers reaching potential hires:

• Search algorithms prioritize job postings with salary information, pushing transparent listings higher in results.
• Data shows salary-inclusive posts generate 30% more engagement than those without this information.
• Candidates filtering searches by salary automatically exclude non-transparent postings.

The result: Small-company job offers without salary ranges may lose ranking in search results visible to potential applicants.

Agencies Exempt under the Law May Elect to Comply to Compete for New Hires Effectively

For legally exempt agencies seeking new hires, salary disclosure may move from optional to essential. When larger competitors are required to advertise their salary offers, job offers that defer salary disclosure until a qualified applicant responds and is interviewed may not work. Non-disclosure of the salary offered may cause the qualified applicant to never see to job posting or eliminate it from consideration in favor of postings that give the applicant salary information. Top-tier candidates, from producers to CSRs, will gravitate toward positions where compensation expectations are clear from the start.

Small agencies that adapt to this new hiring paradigm without legal obligation may find that salary disclosure reduces wasted time on mismatched candidates and accelerates hiring timelines.