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Minnesota’s Pay Transparency Law Signed Into Law

05 Jun

Update Applicable to:Effective date
All employers with 30 or more employees in MinnesotaJanuary 1, 2025

What happened?

Governor Tim Walz signed a pay transparency bill into law on May 17. The new requirement signed into law as part of the 2024 Omnibus Labor and Industry policy bill, specifically includes both postings by the employer itself and through third parties, such as staffing agencies.

What are the details?

Requirements for Job Postings

Note: The requirement includes a notice that employers and their third parties, such as staffing agencies, will have to post in a place where employees frequent and in the language appropriate for the workforce.

  • Job postings must include a pay range or a fixed pay rate.
  • The pay range must be a “good faith estimate” and cannot be open-ended.
  • Postings must also include a general description of benefits and “other compensation.”

Ambiguities and Challenges

  • The broad language of the statute creates ambiguities that may require additional clarification.
  • It is not clear what the impact would be on “pipeline” type requisitions.
  • The law is silent on remote positions that can be performed anywhere in the U.S.

Minnesota Joins Other States

  • Minnesota joins several other U.S. states that require salary ranges on job postings, including California, Colorado, Hawaii, Illinois, New York, and Washington state (Link)

Business Considerations

  • Compliance with the Law: Companies need to ensure they are in compliance with the new law by the effective date of January 1, 2025. This includes providing a “good faith estimate” pay range or a fixed pay rate in all job postings as well as posting an educational poster providing notice of employees’ rights. Employers should check the state website after October 1, 2024 for when the notice will be available.
  • Review of Current Pay Rates, Policies, and Practices: Companies should conduct a thorough review of their current pay rates, policies, and practices in anticipation of the law’s effective date. This will help them identify any areas that may need adjustment to meet the new requirements.
  • Establishment of a Compensation Philosophy: Companies should establish a clear compensation philosophy that outlines the Wage Influencing Factors (WIF) in their organization. This will help them determine what they value and what they pay for and stick to those principles.
  • Evaluation of Job Architecture: Companies should evaluate their job architecture to ensure employees are placed in the correct job codes. This can inform pay eligibility and drive compensation consistency.
  • Preparation for Potential Ambiguities: The broad language of the statute creates ambiguities that may require additional clarification. Companies should prepare for potential ambiguities and challenges, such as the impact on “pipeline” type requisitions and the law’s effect on postings for positions by Minnesota companies that would be located outside Minnesota.

Source References


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