New Minnesota Law Requires Wage and Benefit Disclosure in Job Postings

Minnesota has joined a growing number of states enacting legislation requiring disclosure and information about salary and wages in job postings. These laws are referred to as “pay transparency” or “salary transparency” laws. The primary purpose of pay transparency is to make salary and benefit information public so that employers do not make lower offers to female applicants as compared to male applicants for the same position, for example. Many legislators hope this will create more pay equity and result in fewer wage gaps among people in the workforce.

The new Minnesota pay transparency law becomes effective on January 1, 2025 and will require most Minnesota employers to adjust their hiring practices. So, let’s take a closer look.

The Statute

Minnesota’s pay transparency law will be codified at Minn. Stat. § 181.173. It was passed as a part of the voluminous Omnibus Labor and Industry Policy Bill (SF 3852), which Governor Walz signed into law on May 17, 2024. At this point, the actual text of the new law can be hard to find online. Here it is, in full:

Minn. Stat. § 181.173 – SALARY RANGES REQUIRED IN JOB POSTINGS

Subdivision 1. Definitions.

(a) For the purposes of this section, the following terms have the meanings given.

(b) “Employer” means a person or entity that employs 30 or more employees at one or more sites in Minnesota and includes an individual, corporation, partnership, association, nonprofit organization, group of persons, state, county, town, city, school district, or other governmental subdivision.

(c) “Posting” means any solicitation intended to recruit job applicants for a specific available position, including recruitment done directly by an employer or indirectly through a third party, and includes any postings made electronically or via printed hard copy, that includes qualifications for desired applicants.

(d) “Salary range” means the minimum and maximum annual salary or hourly range of compensation, based on the employer’s good faith estimate, for a job opportunity of the employer at the time of the posting of an advertisement for such opportunity.

Subdivision 2. Salary ranges in job postings required.

(a) An employer must disclose in each posting for each job opening with the employer the starting salary range, and a general description of all of the benefits and other compensation, including but not limited to any health or retirement benefits, to be offered to a hired job applicant.

(b) An employer that does not plan to offer a salary range for a position must list a fixed pay rate. A salary range may not be open ended.

EFFECTIVE DATE. This section is effective January 1, 2025.

There is no other explanation or information available to interpret the statute at this time. So, here is what we know from the statute itself:

Pay transparency is effective in Minnesota on January 1, 2025.
Pay transparency only applies to employers with 30 or more employees in Minnesota, even if they work in different locations in the state. So, employers with fewer than 30 employees should not need to worry about this for now.
Virtually all types of Minnesota employers are covered, including individuals, nonprofits, governmental subdivisions, corporations, and partnerships.
Any employer covered by this law will need to include salary ranges in their job postings going forward.
- The salary range cannot be open ended, and each end of the range will need to have a number.
- If a range is not provided, the employer must list a “fixed pay rate.”
Covered employers will also need to include benefit information, and the statute specifically lists health and retirement benefits.
The law also applies to job postings made in recruiting efforts by third parties, such as recruiters or staffing agencies, on behalf of covered employers.

Questions Raised

This new legislation raises several questions:

Is this law retroactive? In other words, will this only apply to new postings on or after January 1, 2025, or will employers need to update postings that are active when the law takes effect? The statute is not clear. While we wait for further guidance, the safest approach would be to update postings and include a salary range and other required information, to the extent that it is practical, before January 1.
Are there penalties for non-compliance? The statute does not list any specific consequences, such as a fine or private cause of action, that employers would face for failure to comply with pay transparency requirements.
Who enforces this statute? It seems likely that the Minnesota Department of Labor and Industry will be tasked with enforcing the new law, but that is not entirely clear.
“Range?” The statute provides some guidance about what “range” means, and that it can include salary or hourly numbers. However, the statute indicates that the range can also be a “good faith estimate” from the employer. Language like this leaves room for interpretation, and it may require litigation to test the boundaries of reasonableness.
“Benefits?” The statute lists health and retirement benefits as examples of benefits that need to be disclosed. It also states that “all benefits” need to be included. However, the statute only requires a “general description” of the benefits. This provides very little guidance, and it begs the question of how specific that description needs to be. For example, would it be okay to say this in a job posting: “the candidate chosen will have access to health and retirement benefits.”
What else needs to be included in a job posting? For example, do bonuses need to be included? What about other potential incentives such as stock options? This could be a very slippery slope for employers, especially in areas such as executive compensation and employee retention.
Does this apply to strictly internal postings? The new Minnesota law is not as clear as it could be on this. It refers to direct recruiting or indirect recruiting through a third party. One could argue that this language choice refers to external postings but not internal searches.
How does the law apply to “pipeline” positions? The law states that it applies to postings that seek to fill a “specific available position,” so this is also unclear.
Does this apply to positions that can be filled by an employee working remotely, or only to job postings for positions that are based in Minnesota? With the growing trend of remote-only positions, this is an important question.

Other Considerations

Pay transparency does not only affect new hires and recruiting professionals. It could have a significant impact on employee relations and attitudes. As more job posts include pay ranges, benefits, and other information that may not have been accessible before, current employees will have access to more information. This may not be a bad thing overall, especially from an employee perspective, but it could have an impact on culture and employee retention in the short term.

In Minnesota, employees are no longer prohibited from discussing wage and salary information with each other. So, employees already have an increasing sense of where they stand compared with others. However, this new law will put ranges, benefits, and other pay transparency information in front of employees at a level of detail that most likely was not there before.

Pay transparency laws are intended to create more pay equity and reduce wage gaps, but they will also expose more information about wage and pay rates, and now benefits, in an organization. HR and employers should begin planning for this requirement now, and they will need to consider potential impacts on morale and retention. Our HR & Employment Practice Group has already started working with clients on strategies for job postings and reducing potential negative impact on the work environment. They can help with compliance audits, review job postings, analyze wage/pay disclosure practices, and assess and help implement pay transparency strategies. Please contact us if you would like to discuss this issue further.