Legislative lowdown: Minnesota passes pay transparency law

Minnesota has become the latest state to mandate pay transparency, as Gov. Tim Walz signed an omnibus labor bill on May 17 requiring employers to include salary ranges in job postings.

The law, which takes effect Jan. 1, 2025, applies to businesses employing 30 or more workers at one or more sites in Minnesota. It requires not only that employers advertise a good faith estimate of the annual salary or hourly compensation range for open jobs, but also details on benefits and other compensation.

Kristin Bahner, a member of the Minnesota House of Representatives, who wrote the legislation, suggested companies that are transparent about pay “receive more qualified candidates, more productive workers” in an email newsletter, Axios Twin Cities reported.

The growing pay transparency landscape. Minnesota is now part of a growing list of states that have passed salary transparency laws, including California, New York, Illinois, and Colorado.

The laws have spurred a domino effect among employers across the US, prompting some to start sharing pay ranges even if they’re not located in jurisdictions that require it. Most job-seekers now expect organizations to post salary information, HR Brew previously reported.

Like Minnesota, some states go further than simply requiring employers to share pay ranges in job postings. Colorado, for example, has asked employers to include additional compensation information (i.e., bonuses, commissions) and details about benefits in job advertisements since 2021. An amended version of Colorado’s pay transparency law, which took effect in January, now mandates that companies share information about new job opportunities internally with their workforces, along with the expected salary and benefits. Illinois and New Jersey lawmakers have also included in legislation similar provisions about promotion opportunities.

What Minnesota employers should know. Ahead of the Minnesota law taking effect next year, affected HR departments can review their organization’s “current pay rates, policies, and practices,” attorneys with law firm Stinson wrote in a blog post.

Complying with pay transparency laws may represent a financial investment for employers, researchers with the Federal Reserve Bank of Minneapolis noted. “Hiring managers may not know the competitive market pay for the roles they are hiring, and they may have to modify existing pay practices to ensure that employee pay is in line with the pay that will be posted,” they wrote.