Basic Requirements:

• Effective January 1, 2025, employers with at least 30 employees in Minnesota must include, in all postings for a specific available position, the starting salary range and a general description of all benefits and other compensation offered for the position. If the employer does not offer a salary range, it must list a fixed pay rate on the posting.
• The law defines “salary range” to mean the minimum and maximum annual salary or hourly wage range “based on the employer’s good faith estimate” for the position at the time of the posting. The salary range cannot be open ended.
• The required general description of other compensation and benefits specifically includes health and retirement benefits. Subject to further guidance, this may also include commissions and bonuses.
• The requirements are broad. Essentially, for covered employers, any posting intended to recruit applicants that lists desired qualifications, whether made electronically or in print, is considered a job positing subject to this law. This includes postings on the employer’s behalf by recruiters and other third parties.

This Minnesota Department of Labor and Industry and the Attorney General have authority to investigate and enforce this law. But at this time, it is unclear what specific penalties employers may face for violating this law.

Next Steps for Employers:

Covered employers have until January 1, 2025 before this law goes into effect, which gives a short window to prepare. Without pre-existing systems in place, some employers may have to create new procedures to establish pay ranges for each position by relying on market analysis, pay equity considerations, and their own employee data. That makes 2024 a perfect time to conduct any needed market and pay equity analyses to ensure salary ranges for postings accurately reflect the required good faith estimate, are consistent with comparable roles, competitive in the marketplace, and equitable.

Further Considerations:

Falling back on the “good faith estimate” and posting a broad salary range is not a fool-proof method.  The Legislature seems to have included this “good faith estimate” language to curtail employers’ use of overly broad salary ranges, while providing some wiggle room in the event that a successful candidate is offered a salary outside the posted range.

Another consideration for employers as they determine salary ranges is whether, or to what extent, disclosing salary ranges may impact their ability to attract and retain talent. It may not be enough to look at historical data for a specific role or the company’s internal pay hierarchy. Employers may wish to look at their competitors or consult market data for comparable roles when developing salary ranges for job postings.

This is also a great time for employers to evaluate how to best describe a particular role given the employer’s current workforce, competitors, and willingness to pay. Employers who have many roles that are broadly defined may consider restructuring to create more narrowly defined roles. For example, rather than hiring applicants with varying levels of experience under the same catchall job posting, the positions could be restructured into levels based on experience and responsibilities, with commensurate salary ranges.

Finally, employers should position themselves to demonstrate that the salary ranges in their postings accurately reflect the pay for that position. Employers should regularly audit pay for positions. For each requisition, employers should revisit whether the pay range is still an accurate, good faith estimate of the pay range for a position.