Minnesota is the latest jurisdiction to enact a pay transparency law, joining other localities such as California, Colorado, Illinois, Maryland and Washington, D.C., New York, and Washington state that are taking steps to address pay disparity concerns.
On May 17, 2024, Minnesota Gov. Walz signed the Omnibus Labor and Industry policy bill, including new job posting requirements. This law is in addition to existing Minnesota wage disclosure protections for employees.
The new law takes effect Jan. 1, 2025.
Pay Transparency Disclosures
The law applies to employers that employ 30 or more employees at one or more sites in Minnesota. The law does not address whether it applies to positions that could be filled by an employee working remotely.
Under the law, in each posting for a job opening, a covered employer must disclose the starting salary range or fixed pay rate and a general description of all benefits and other compensation to be offered to a selected job applicant. The description of benefits and other compensation must include, at a minimum, any health benefits, retirement benefits, and other financial perks associated with the position.
Employers must set the salary range in good faith. Salary range is defined as the “minimum and maximum annual salary or hourly range of compensation” anticipated “at the time of the posting of an advertisement for such opportunity.” The range cannot be open-ended. Alternatively, if the employer does not want to provide a wage range, the employer must list a “fixed pay rate,” meaning the exact salary or hourly rate the employer intends to pay a successful applicant.
Under the law, a job posting encompasses (1) any solicitation intended to recruit job applicants for a specific available position, (2) recruitment performed by an employer directly or by a third party, such as job sites, and (3) electronic or hard-copy job postings that list qualifications for desired applicants.
Enforcement
The Department of Labor and Industry or the Minnesota Attorney General may enforce violations of this law, which does not specify penalties for noncompliance.
Practical Considerations
Before the Jan. 1, 2025 effective date, covered employers should consider reviewing all job postings to ensure they include the required information.
Employers also should consider implementing policies to ensure recruiters and others involved in the hiring process know how to respond to prospective employee inquiries about pay and benefits. Employers also should train all personnel involved with hiring and managing employees on the new requirements.
Finally, multistate employers may consider evaluating if the company is in compliance with pay transparency laws in other states and localities.