On January 1, 2025, a significant shift in Minnesota’s employment landscape will take place with the implementation of a new pay transparency law. Under this statute, employers will be required to disclose salary ranges or fixed pay rates in all job postings. This new mandate, part of the broader Omnibus Labor and Industry Policy Bill signed into law in May 2024 by Governor Walz, will be codified at Minn. Stat. § 181.173.
This legislation marks a clear departure from previous practices, and it underscores a growing trend across the U.S. towards pay transparency. Beyond simply updating job postings, this law signals the need for employers to reassess their hiring strategies and compliance protocols to ensure they align with the new legal requirements.
Who Does the Law Affect?
The statute applies to employers with 30 or more employees at one or more locations within Minnesota. The definition of a job “posting” is broad, covering any effort to recruit for a specific available position, including recruitment efforts made directly by the employer or indirectly through third-party agencies.
In addition to disclosing starting salary ranges or fixed pay rates, employers must also provide a general description of the benefits and other forms of compensation—such as health or retirement benefits—that will be available to the selected candidate.
What Employers Need to Do
The first step towards compliance is a comprehensive review of all job postings. Employers should ensure their postings clearly state starting salary ranges and include details about benefits packages and any other forms of compensation. Implementing standardized job posting templates may help streamline this process and reduce the risk of inconsistent disclosures.
Additionally, employers will need to establish or update internal policies to reflect these new requirements. Training human resources staff and hiring managers on the law’s mandates will be essential to maintaining compliance across all levels of recruitment. This is particularly important for companies that hire frequently or rely heavily on third-party recruiters to fill positions, as all parties involved in the hiring process must be aware of the new legal obligations.
Compliance Without Enforcement Mechanisms
One notable aspect of the law is its lack of explicit penalties for noncompliance. Although Minn. Stat. Ch. 181 does not outline specific consequences for employers who fail to follow these new pay transparency rules, enforcement could fall under the jurisdiction of the Minnesota Attorney General and the Department of Labor and Industry. This creates an environment where, while there are no automatic fines or penalties for noncompliance, employers may still face legal scrutiny or enforcement actions from state agencies. As a result, proactive compliance is essential.
Preparing for the January 2025 Deadline
With the January 2025 effective date quickly approaching, now is the time for employers to take steps to align their practices with the new legal framework. A review of hiring procedures, compensation structures, and job posting processes can help identify areas of potential noncompliance before the law takes effect.
We’re Here to Help
As Minnesota businesses prepare for the changes ahead, Henson Efron attorneys are ready to provide the legal guidance needed to implement effective pay transparency policies. Our team is dedicated to helping employers navigate these changes, mitigate risks, and ensure full compliance with the law. Whether you need assistance with reviewing your job postings, updating hiring policies, or understanding the broader implications of this statute, we are here to help.
Contact us today to discuss how we can support your business in meeting the requirements of Minnesota’s new pay transparency law.
The purpose of this article is merely to provide general information and should not be construed as legal advice.
