By Mark Adams
Beginning September 2, 2025, Massachusetts employers will be subject to new regulations aimed at eliminating hidden or misleading charges, commonly referred to as “junk fees.” The regulations, issued under 940 CMR 38.00 – Unfair and Deceptive Fees, expand the Commonwealth’s consumer protection framework and are enforceable by the Attorney General’s Office. While these rules are primarily directed at protecting consumers, they also carry important implications for employers, particularly when employee-facing programs involve optional services or subscription-based offerings.
The new regulations require that businesses clearly disclose the total price of a product or service at the very first point of presentation, including all mandatory fees and charges. Optional or waivable fees must also be explained, along with instructions on how to avoid or opt out of them. In addition, any trial offers, or auto-renewing subscriptions must be accompanied by clear disclosures about when charges will begin, the exact amount to be charged, and the steps for cancellation. Businesses must also ensure that cancellation methods are simple and at least as easy to complete as the enrollment process.
For HR professionals, this regulation matters because many employee benefit programs, wellness subscriptions, tuition assistance plans, or affinity programs may involve fees, trial periods, or recurring charges. If employees are offered these programs through an employer’s HR or benefits platform, the employer must ensure that materials are compliant with the transparency requirements of 940 CMR 38.00. This includes reviewing benefit guides, onboarding documents, and vendor communications to confirm that costs and cancellation rights are disclosed clearly and prominently.
The consequences for non-compliance can be significant. Employers that fail to adhere to the junk fee rules may face enforcement actions by the Massachusetts Attorney General’s Office, including penalties, corrective mandates, and reputational harm. Just as importantly, employees who perceive hidden or unfair fees in benefit programs may lose trust in their employer’s communications and HR practices.
Practical steps for HR teams include auditing all employee-facing materials, updating benefits as well as enrollment portals, and work closely with third-party benefit vendors to confirm their compliance with Massachusetts standards. Taking these steps now will not only reduce compliance risks but also strengthen employee trust through transparent communication.
The full text of the regulations can be reviewed here: https://www.mass.gov/doc/junk-fee-regulations-940-cmr-3800-0/download
In addition, the Massachusetts Attorney General’s Office has also issued FAQ guidance which can also be found here: https://www.mass.gov/doc/guidance-with-respect-to-unfair-and-deceptive-fees-07292025/download
Bottom line: The Massachusetts junk fee regulations taking effect September 2, 2025, are a timely reminder that transparency in pricing is as much an HR issue as it is a consumer protection issue. By acting early, employers can ensure compliance, avoid penalties, and reinforce a culture of fairness and trust with employees.