Minnesota’s New Pay Transparency Law: How it Affects Employers
Minnesota recently passed a pay transparency law requiring employers to disclose a job’s starting salary range and benefits in job ads. Salary ranges may not be open-ended, and a fixed pay rate must be in the job posting if offered. The law was signed into law in May 2024 and will take effect on January 1, 2025.
This legislation is aimed at promoting pay equity by ensuring applicants are well-informed about compensation during the hiring process. Employers must either include this information in job postings or provide it upon request before offering a position.
For employers, this law introduces new compliance requirements that impact hiring procedures. Businesses must ensure that compensation and benefits details are accurate and transparent to avoid legal challenges. Employers may need to revise their job postings, hiring workflows, and internal compensation structures to meet the new standards.
Regulatory Compliance
To ensure compliance with Minnesota employment laws, employers should take the following steps:
- Review their job postings and ensure they include the required salary range and benefits description.
- Update their internal policies and train hiring managers in compliance.
- Confirm that salary ranges reflect actual compensation practices and align with internal pay structures.
- Raise transparency with current employees to prevent friction between new and old employees.
- Stay informed of any updates or guidance related to the new law to ensure ongoing compliance.
Benefits of Wage Transparency
This change aims to reduce the racial and gender pay gap and promote a more equitable workplace. In addition, there are more benefits for the employer, including:
- Attracting top talent: Openly sharing salary ranges helps attract qualified candidates who are clear about compensation expectations, making the hiring process more efficient.
- Building trust: Transparent pay practices promote trust within the workforce, improving employee morale and retention.
- Reducing pay gaps: Wage transparency helps eliminate unintentional biases and wage disparities, promoting a fair and equitable workplace.
- Compliance: It ensures employers meet legal requirements, reducing the risk of legal disputes or fines.
For employers, compliance with these laws can enhance their reputation, attract top talent, and improve workforce morale while minimizing legal risks. Implementing wage transparency requires updating job postings and hiring practices to meet the legal standards. Employers benefit from a more open, fair, and competitive recruitment process.
Quinlivan & Hughes provides comprehensive employment law services for employers, ensuring compliance and effective management of workplace issues such as hiring, firing, and policy development. Contact us today to protect your business and navigate employment challenges with confidence. Learn more at Quinlivan.com.