MN pay transparency law aims to reduce discrimination, wage gaps

ST. PAUL, Minn. (FOX 9) - Under a new state law, employers will have to include a "good faith" salary range or fixed pay rate in job ads, a measure supporters said would reduce discrimination and wage gaps.

The law also requires companies to include information on any benefits.

In May, Gov. Tim Walz signed the measure into law.

Salary range law

What they’re saying: Experts say the law could cause other problems, such as making it more difficult to negotiate. Some employers may also post large pay swings.

Bonnie Reinke was laid off from her sales and marketing job in October 2023 and has since struggled to find a new role.

Reinke, who lives in Eagan, said she has gone through multiple rounds of interviews only to discover that the salary offered did not meet her expectations. 

"It was about a 35% gap, and I could not make that work,’ she recalled. "To get to the point where they start talking compensation, and they’re so far off – that doesn’t make sense. It’s not necessary."

Reinke’s career counselor, Beth Glassman, said she often encounters jobseekers who have a difficult time getting pay information from prospective employers. 

"She got an offer, and it was significantly less than what she was led to believe, and so that was not a great situation for her," she said of one client’s experience.

Alan Benson, a University of Minnesota professor who specializes in compensation, said pay transparency laws work but have drawbacks.

"After these laws were passed [in other states], there was some pay compression, meaning that there’s a smaller gap between the people who are relatively low paid and those who are relatively highly paid," he said.

He said the downsides include less room to negotiate and the possibility that companies post sizable swings in pay.

"Employers are going to at least have some incentive to post some wider ranges," he said.

What’s next: The law takes effect Jan. 1.