Updates to State Pay Transparency Laws
In recent years, states have increasingly passed laws requiring job postings to contain information disclosing the salary range offered for the position and in some cases other employment benefits. Two states—Illinois and Minnesota—are the latest to require this information in job postings with both states implementing pay transparency laws on January 1, 2025.
Illinois
In August 2023, Illinois passed HB 3129 into law which imposes pay transparency requirements on employers posting job opportunities in Illinois. Effective January 1, 2025, employers with 15 or more employees must include the pay scale and benefits in any job posting for any position that:
- Will be physically performed, at least in part, in Illinois; or
- Will be physically performed outside of Illinois, but the employee will report to a supervisor, office, or other work site in Illinois.
The pay scale and benefits must include the position’s wage/salary or wage/salary range, and a general description of the benefits and other compensation offered including, but not limited to, bonuses, stock options, and other incentives the employer reasonably excepts in good faith to offer the position. The information should be based on the applicable pay scale, the previously determined wage/salary range for the position, the actual wage/salary range for the position, or the budgeted amount for the position. Rather than including the required information in every job posting, employers may include a hyperlink in the job posting which links out to a public website that contains the required pay scale and benefits information.
Employers who work with third parties to post available positions must provide the pay scale and benefits information to the third party so the third party can include the required information. Any failure by the third party to provide the required information will be the liability of the third party if the employer provides the required information.
The law does not require an employer to post a position, but job applicants are permitted to request pay scale and benefits information if the information has not been made available to them. The law requires employers to notify current employees about opportunities for promotion no later than 14 days after making an external job posting.
Minnesota
In May 2024, Minnesota passed an Omnibus Labor and Industrial Policy bill into law. Included in this bill was a new pay transparency requirement. Effective January 1, 2025, employers with 30 or more employees in Minnesota are required to disclose the starting salary range and a general description of all benefits and other compensation, including, but not limited to, any health or retirement benefits. If the employer does not plan to offer a salary range, they must list the fixed pay rate.
Key Takeaways:
Employers who are subject to either the Illinois or Minnesota pay transparency requirements would be well served to review their job posting to ensure that they meet the requirements of the applicable state law come January 1, 2025.
The information provided is a summary of laws and regulations relating to employee benefit plan compliance. This information should not be construed as legal advice. In all cases, employers should consult with their own legal counsel.
