Pay Transparency Comes to Minnesota

Pay transparency laws are increasingly being implemented across the United States with a purported goal of increasing fairness, addressing wage inequalities and promoting a more transparent hiring process. A dozen states and the District of Columbia have passed some form of a pay transparency law in recent years. The Minnesota legislature passed its own version of a pay transparency law this year with an effective date of January 1, 2025.

Requirements of the Law

Under the new Minnesota law, employers with 30 or more employees at one or more sites in Minnesota must provide the minimum and maximum annual starting salary or hourly range of compensation, compliant with the following rules:

• The range may not be open ended.
• The range must be based on a “good faith estimate.”
• If the position does not have a range, a fixed pay rate must be listed.

Employers must also provide a general description of all benefits and other compensation, including health or retirement benefits.

Scope of the Law

These requirements apply to “any solicitation intended to recruit job applicants for a specific available position.” This includes any electronic or hard copy posting, and its scope extends to all external or internal-facing job postings.

Employer’s Next Steps

In advance of the January effective date, all employers who have Minnesota employees or recruit in Minnesota should ensure that their job postings comply with the new law and that any third-party vendors they use to facilitate job postings are likewise in compliance. Employers should also be aware that Minnesota’s wage disclosure protections for applicants remain in effect and prevent an employer from requiring an applicant to provide their salary history or even asking, encouraging or prompting an applicant to disclose their pay history for the purpose of negotiating wages, salary, benefits or other compensation.

Multi-state employers need to prepare for pay transparency laws in other states, as well. Illinois, Maryland, Massachusetts and Vermont have recently passed pay transparency laws, and each state has slightly different requirements for employers to meet.

This area of employment law is rapidly expanding and requires significant attention to detail. If you have further questions regarding this topic, please contact your Fredrikson attorney.